Those that are preparing to enter into retirement are expected to alter the housing market in four major ways, according to a new report.
Lesley Deutch, Principal at John Burns Real Estate Consulting said in a report that "tomorrow's retirees will completely transform the housing industry." According to the report, the retiree explosion began in 2012 and has only grown since that time.
"We have done a tremendous amount of research on this group, all of whom were born in the 1950s," she said. "We call them the innovators because they have created so many innovations throughout their lives."
John Burns deemed this group to be innovators because they are tech savvy, which began with their space race fascination as kid. With almost 50 percent reporting that they intend to live with their parent or adult child in the near futures, this cohort is highly family-oriented. In addition, retirees are more affluent than any prior generation of retirees. This is due to careers that perfectly coincided with a strong economy, a workaholic attitude that led to more double-income households and delayed retirement, 80 percent homeownership (With the majority having no mortgage today), and 30 years of falling interest rates boosting home values and retirement accounts.
All of these factors above will play into the innovative retiree's next housing move. They will:
- Innovate retirement to be more about health, family, experiences, and continuing to work
- Move several more times, including selling their home and moving into a rental in an urban area that is walkable to entertainment
- Focus more on living near their kids, with huge rewards to the builders who sell multigenerational-living homes that satisfy Innovators' needs
- Continue migrating south, but not just to the traditional retirement areas, as they will want to be near their kids and a job
According to a newly released Rent vs. Buy Report from Trulia, retirees are stuck between deciding to buy a home or rent one once their working days are done. However, it all depends on the legacy they want to leave behind.
Though nationally, the report shows that buying is slightly cheaper than renting on the whole, that’s only if the retiree cares about leaving an inheritance for their loved ones upon death. If they don’t care about the home equity they leave behind, the report shows that renting a home is actually the more affordable option in 98 of the top 100 U.S. cities for retirees.