Most baby boomer homeowners won’t downsize as they age, with 78% intending to stay at their current address, Redfin found in a recent survey.
This is not good news for housing supply, which is already declining to historic lows. With fewer existing homes for sale, conditions are unfavorable for younger buyers looking for a family-sized property.
For example, while millennials with children owned 14% of U.S. homes with three or more bedrooms in 2022, empty-nest baby boomers accounted for 28% of that market, Redfin said in a separate report. This has kept potential buyers locked out, with millennials forced into renting or being pushed out of cities.
According to baby boomers surveyed in February, it’s financial incentives that keep them in place.
27% of respondents cited mortgage considerations for why they are not selling, since more than half of baby boomers have paid off their loans. For those who still have a mortgage, almost all baby boomers have rates significantly lower than current levels of 6%.
Meanwhile, 21% will not move due to rising house prices. The remaining 51% love their home and have no reason to move.
This is a sign of a change in trend, since American homeowners lived on average only 6.5 years per house in 2005, Redfin previously noted. Today, the median tenure has reached 11.9 years, while 40% of baby boomers have stayed put for at least 20 years.
“The reality is that many homeowners and renters will need to move to a location that better meets their needs as they age, such as a senior living community or a single-story home in an accessible neighborhood,” said Daryl Fairweather, Redfin chief economist, in the new report. .
But the baby boomers surveyed aren’t yet focusing on that. Only 20% of these homeowners plan to move to a 55+ community, while 20% would move with an adult child or into an assisted living facility.
“The government’s failure to prioritize building housing for seniors is further encouraging older Americans to stay put, exacerbating the inventory shortage. Politicians should focus on expanding the housing stock. housing that meets the needs of older Americans, which could contribute to the affordability and availability of housing for all,” Fairweather added.
Would-be buyers may see some inventory relief as mortgage rates continue to gradually decline this year, bringing back sellers. Already, the supply of existing homes jumped 20.8% in February on an annual basis, Zillow reported.
businessinsider
