Boomers aren’t moving.
Or at least, they’re not moving as often as younger generations.
That’s the conclusion of an analysis of US Census data by real estate site Redfin, as reported on Yahoo. Overall, Americans are staying in their homes twice as long as they used to, and Boomers are driving the trend.
The Boomer influence on real estate — and where it goes next — is a big topic, and we’ve reported on it often, for example here, and here. It’s at the center of many SuperAging issues, including aging in place and financial planning. Cash out and downsize? Stay in your home and invest on improving it? On balance, Boomers (aged 57 to 77) are staying in place — or at least, staying in place in greater numbers, or for a longer time, than conventional wisdom has anticipated.
In 2005, according to the Redfin analysis, the median homeowner tenure — how long were they in before they sold and moved on — was only 6.5 years. Today it’s 11.9 years, nearly double. “The shift is largely driven by baby boomers, the real estate listing side said, who are staying put as mortgage rates and home prices remain elevated.”
Boomers are also over-represented on ownership of larger homes. They own 28% of US homes with three or more bedrooms — double the share owned by millennials.
A big factor is finance: “Older Americans are hanging onto their homes because they’re financially incentivized to do so. Most (54%) baby boomers who own homes own them free and clear, with no outstanding mortgage.”
This, along with rising house prices, provides a disincentive to move: why trade no housing debt and no mortgage payments for high housing debt and high mortgage payments? “High rates have discouraged existing homeowners from listing their homes for sale, as many are looking to cling to the ultra-low interest rates at which they financed their homes years ago.”
Median monthly mortgage payments in the USA are around $2,600 while Boomers who have paid off their mortgage and own their homes outright incur about $600 per month in housing costs, according to Redfin. It’s a big spread.
Far from selling and downsizing, there’s strong evidence that Boomers are invested in more amenities to make their homes more suitable for aging in place and for enjoying new activities. We’ve reported on the trend to “fun-sizing,” rather than downsizing, in which older homeowners are really starting to think about — and invest in — lifestyle-related features that make their homes more conducive to an rich, active and fulfilling life: “The expectation used to be that when people retired and became empty nesters, it was time to downsize from their family homes into smaller, more manageable condos and apartments. But times have changed; many retirees have decided that now is the time to enjoy the homes they worked so hard to create—and even improve them to make room for new dreams. Enter a new alternative to downsizing: fun-sizing.”
The true SuperAging mindset!