Most Baby Boomers want to live in their current homes for the rest of their lives, according to a new survey, raising questions about whether seller’s agents and housing policy experts can look to seniors for a fresh pulse of housing inventory just as Millennials are in their prime homebuying years.
The survey of over 1,500 American homeowners aged 60-75 was done by American Advisors Group, a reverse mortgage lender.
Eighty-two percent of survey respondents said they would prefer to live out their remaining years in their current home if they can, relying on services like home health aides instead of decamping to an assisted living facility. The pandemic impacted about half of survey respondents’ decisions, making them more inclined to avoid nursing homes and other facilities which became the sites of many COVID-19 deaths. Two-thirds of survey respondents said they had told their children of their desires.
American Advisors Group suggested that, with 55 percent of survey respondents reporting that they had paid off their mortgages already, the stage could be set for a revival of interest in reverse mortgages, which gained a stigma during the Great Recession.
“Our studies have shown that seniors in this country have a strong attachment to their home and the pandemic only strengthened that bond,” AAG Chief Marketing Officer Martin Lenoir said in a statement. “It’s no secret that many seniors have built substantial equity in their homes after years of ownership, but what is interesting is that very few want to sell their house to obtain that money. For seniors, the comfort, safety and independence of their home outweighs the desire to move and that’s why we’re seeing so many older Americans interested in reverse mortgages.”
There’s a lot riding on whether Baby Boomers, who are the biggest generational cohort in American history, will sell their homes and move into assisted living facilities. Previous generations tended to chose assisted living or downsizing over aging in place, freeing up family-sized housing inventory for younger buyers to purchse.
A recent Zillow analysis of Census Bureau data showed that, going into 2020, the median age of a buyer was 44 in 2019, up from 40 in 2009, Zillow found. The share of Baby Boomers in the nation’s housing market grew 47 percent from 2009 to 2019 while the share of recent buyers between ages 18 and 39 fell 13 percent. The increase came as tens of millions of Millennials entered their prime homebuying years, resulting in a titanic demographic clash that pitted Boomers with more down payment savings and home equity against cash-poor Millennials armed with the lowest mortgage interest rates in 50 years.
“Even before the pandemic, the largest-ever generation entering their 30s and the hangover from more than a decade of underbuilding were on a collision course set to define the U.S. housing market,” Jeff Tucker, a senior economist at Zillow, said in a statement accompanying the research. “The pandemic supercharged demand for housing, bringing the shortage into relief sooner than we expected, as millennials sought bigger homes with Zoom rooms, and older Americans accelerated retirement plans, spurring moving decisions.”
Across the country, Zillow found cheaper metros saw higher rates of Millennial homebuying, like Buffalo and Salt Lake City, with the exception of San Jose, California, in the heart of Silicon Valley. Zillow researchers speculated that the region’s high median income was likely the cause.
“There are many hurdles Millennials must overcome when buying homes of their own, one of them being fierce competition from the next-most-populous generation: Baby Boomers,” Tucker said. “Whether downsizing or moving to a new town, Baby Boomers being more active means competition that previous generations did not have when buying their first home. And older buyers have the advantage of a lifetime’s worth of savings and home equity to leverage in a competitive offer.”
