Home prices will fall as 'silver tsunami' of baby boomers to unload fresh housing supply, top Wall Street forecaster says

• Meredith Whitney, who called the 2008 crash, said a "silver tsunami" will bring more supply of homes to the market.
• More boomers are looking to downsize as they age, freeing up inventory, Whitney told Yahoo Finance.
• "You're going to see existing home prices come down."

Boomers are growing older, and they'll start downsizing their homes at a quicker pace — and that's great news for the housing market, one expert says.

Meredith Whitney, known for calling the 2008 housing crash, said that aging boomers will bring a wave of supply to the market by freeing up inventory as they shift to smaller houses.

"Another major demographic trend you see is the aging of America, what's called the 'silver tsunami', is 10,000 people a day turning 65, and by 2030, the entire baby boomer generation will be over 65," Whitney told Yahoo Finance on Thursday. "That'll be 20% of the US population."

That trend will help bring prices down, as more homes on the market will soften the impact of housing demand, which is a big change compared to the past few years during which a massive supply crunch has helped push housing prices to all-time highs.

But more homes seem to be coming to the market, though the trend varies by region. 

"You're going to see more affordable housing being created by new home builders, and you're going to see existing home prices come down," Whitney said.

While home prices are still perched at high levels, mortgage rates are also at multi-year highs, although they have been sliding lower over the past month. This week, DoubleLine Capital said that a 5% rate is the "magic number" that could allow prices to drop.

"If you lower the overall home price, the serviceability becomes more affordable," Whitney said. "That's what I think is invariably going to happen because you're going to have more seniors, the silver tsunami, selling and there are fewer buyers so the give is going to be lower home prices."

As for now, Whitney said she would advise Millennials to wait before buying, while she would advise boomers to sell.