Older U.S. residents are choosing to spend their golden years in their own home.
A recent survey from Redfin found that three-quarters of older homeowners intend to remain in their current residence as they grow older, and, according to the 900 people who responded, it is the most common aging plan among homeowners in the baby boomer (60 to 78 years old) and silent generation categories (79 to 81 years old).
While 78% planned to stay in their own home, the second most popular option was moving into a 55-plus community. This was followed by moving in with adult children, transferring into an assisted-living community, and, finally, moving in with friends.
Boomers Aiding the Housing Crunch?
The decision by most baby boomer homeowners to stay in their homes as they age may contribute to the ongoing shortage of available homes for sale. While increases in new listings have been observed in recent months, inventory levels are at record lows.
This lack of housing can be attributed to homeowners who took advantage of the exceptionally low mortgage rates during the pandemic and are choosing to stay put to avoid higher rates in today's market. A significant number of homeowners belong to the baby boomer generation.
Recent analysis by Redfin revealed that baby boomers without children at home possess 28% of the three-bedroom-plus homes in the United States.
In contrast, millennials who have children only own 14% of these homes. The influence of baby boomers on the housing market is significant due to their high homeownership rates. Approximately 80% of boomers own the homes they reside in, compared with 55% among millennials.
There is no financial incentive for baby boomers to sell their houses, so they are clinging on for as long as possible. Of the baby boomers who own homes, 54% don't have a mortgage. Among those who do, almost all have a significantly lower interest rate compared to if they sold and bought a new house.
Staying at Home Is About Dollars and Sense
Some states' tax systems, such as those in Texas and California, encourage seniors to age at home. More and more, people can remain in their homes as they age thanks to developments in health care and technology.
“Older Americans are aging in place because it makes financial sense, but also because it’s human nature to avoid thinking about challenging scenarios such as needing help as you get older,” said Redfin chief economist Daryl Fairweather. “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.”
“But 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.”
