Older Homeowners Plan to Stay Put

Most homeowners of the Gen X and Baby Boomer generations plan to retire and grow old in the homes they now live in, according to a new survey from Bank of America.

Approximately 70% of homeowners ages 45-76 cite avoiding today’s high home prices and mortgage rates as reasons to remain in their current homes upon retiring.

According to Bank of America Securities, nearly 95% of current mortgage holders benefit from loans with rates of 5% or less.

Also, older homeowners may be less inclined to sell and rent as this adds a fluctuating cost which can be challenging for retirees with a fixed income.

Bank of America’s Matt Vernon, Head of Retail Lending, says this demographic’s decisions can greatly impact residential home inventory, because this age group accounts for 70% of the country’s 84.7 million owner-occupied homes.

“While home prices are holding steady in many parts of the country, demand continues to exceed supply, and there is still room for inventory to catch up before the housing market is in balance,” Vernon said.

The survey showed that among those planning to stay in their homes when they retire, 78% “see no reason to move,” while 22% say they’ve “put so much work into their home that they don’t want to move.”

In fact, 61% of Gen X and 69% of Baby Boomer homeowners have renovated or remodeled their home, adapting them to fit their lifestyles.

With more people staying in their homes and fewer selling them, active home listings fell from 1,468,901 units to 732,276 units between July 2016 and September 2022. That’s a 50% decrease since Realtor.com began tracking this data, Vernon points out.

“A decade of insufficient homebuilding has also exacerbated low inventory levels,” Vernon notes, “with housing supply growing only 6.7% from 2010 to 2020, roughly half the rate of the previous decade.”

Vernon adds that this is not necessarily bad news for younger homeowning hopefuls, because many older-generation homeowners plan to give the next generation money to buy a home or give them their home to sell (38%, according to the survey) or pass down their home for the next generation to live in (36%).

The study, on which Vernon was commenting, was conducted Oct.19-23, 2022 on a sample of 1,554 general population, age 45-76, homeowners.

Click here to view the full study.