Baby boomers may become the largest generation of retirees in history, according to a report from Trulia. As this generation moves into retirement, the baby boomer’s housing preferences may determine the housing options available to younger people entering the market.
Baby boomers, or those born between 1945 and 1964, are delaying downsizing, as they are working longer and keeping their kids in their home for longer. These groups have more space in their homes as well, as empty-nest boomers have two extra bedrooms on average, compared to one extra for under-65 buyers.
On average, these boomers are staying in these large homes for longer. This has led some to believe that they are taking up valuable home inventory in high-demand markets. According to Trulia, 83.4 percent live by themselves, with no younger generations. This is due in part to the higher-than-average number of seniors who are still working, as the number of those 65 and older who are still working rose from 15.9 percent in 2005 to 19.3 percent in 2016.
More affordable metros, such as Knoxville, Tennessee, Colorado Springs, Colorado, and Dayton, Ohio, have more opportunity for these seniors to downsize. However, Trulia notes that even in these areas, inventory has been declining for several years. For example, inventory decreased 12.4 percent year over year during the Q2 2018 in Knoxville.
This has led to a relatively even split between single-family and multifamily senior movers. Trulia notes that in 2016, 5.5 percent of senior households moved, with 2.7 percent moving to single family and 2.4 percent moving to multifamily. This has remained virtually unchanged since 2005 when the rate was 5.5 percent and a 2.5 percent and 2.5 percent single and multi-family split.
With a shortage in starter-size homes, downsizing is still difficult for retirees to move to smaller homes. This means that unlike what some observers say, seniors are not solely responsible for the housing shortage, and are in fact feeling its impact themselves.
Find the report from Trulia here.