Most home-owning baby boomers will not downsize as they age, with 78% intending to stay put at their current address, Redfin found in a recent survey.
That’s not good news for housing supply, which is already dwindling at historic lows. With fewer existing homes on sale, conditions are stacked against younger homebuyers in search of a family-sized property.
For instance, while millennials with kids owned 14% of US homes with three or more bedrooms in 2022, empty-nest boomers made up 28% of this market, Redfin said in a separate report. It’s kept prospective buyers locked out, with millennials stuck renting or getting priced out of cities.
According to baby boomers surveyed in February, financial incentives are what’s keeping them in place.
27% of respondents cited mortgage considerations for why they’re not selling, as over half of boomers have paid off their loans. For those still on a mortgage, almost all boomers have rates that are significantly lower than today’s 6% levels.
Meanwhile, 21% won’t move due as home prices have climbed to high. The remaining 51% like their home, and have no reason to move.
It’s a sign of shifting trends, as US homeowners averaged just 6.5 years per home in 2005, Redfin previously found. Now, the median tenure is up to 11.9 years, while 40% boomers have stayed put for at least 20 years.
“In reality, many homeowners and renters will need to move somewhere that better meets their needs as they age, like a senior-living community or a one-story home in an accessible neighborhood,” Redfin Chief Economist Daryl Fairweather said in the new report.
But surveyed boomers aren’t focused on that just yet. Only 20% of these homeowners plan to move to a 55-and-over community, while 20% would move in with an adult child or into an assisted living facility.
“The government isn’t prioritizing building housing for seniors, which is further encouraging older Americans to stay put, exacerbating the inventory shortage. Politicians should focus on expanding housing stock that meets the needs of older Americans, which could help with housing affordability and availability for all,” Fairweather added.
Prospective homebuyers could see some inventory relief as mortgage rates continue to gradually fall through this year, bringing back sellers. Already, existing home supply surged 20.8% in February on an annual basis, Zillow reported.
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