According to a Redfin survey, a vast majority of baby boomers who own homes plan to stay in their current properties as they age— a trend that can have a big impact on housing supply moving forward.
Seventy-eight percent of older homeowners in the United States intend on aging in place, per the survey fielded by Redfin to some 3,000 American homeowners and renters in February. The share of boomer homeowners who plan on aging in their homes is nearly four times as large as the share of the second most common response; 20% of baby boomer respondents said they were either considering a move into a 55-plus community or have already done so (20%).
Another 10% of baby boomers said they were planning on moving in with adult children, with a similar share indicating that they were planning on moving into an assisted living facility. Six percent said they were planning on moving in with friends.
Baby boomers largely plan on holding onto their current homes because they lack an incentive to let them go, Redfin said. Most older homeowners no longer have a mortgage to pay, while most of the ones that still do have a much lower interest rate than the one they’d get if they sold their current property and bought a new one.
Unsurprisingly, fifty-one percent of baby boomers who aren’t planning to sell their home anytime soon say they like their home and have no reason to move, Redfin’s survey found. Twenty-seven percent say it’s because their home is completely or almost paid off, and 21% are staying put because home prices are now too high.
But baby boomers hanging tight is also already exacerbating the inventory shortage by keeping the supply of trade-up homes constrained, Redfin noted. Consider that empty-nest baby boomers own 28% of homes with at least three bedrooms, according to a separate Redfin analysis. Millennials with kids, on the other hand, own just 14%.
“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 Daryl Fairweather, chief economist at Redfin. “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.”
