A recent study from Trulia indicates that more and more baby boomers are saying no to downsizing and staying in the home where they hold so many family memories.
“We’re just not seeing that much downsizing,” says Alexandra Lee, a housing data analyst at Trulia, a real estate research firm.
Traditionally, Americans between 55 and 75 years old have moved into a smaller home after retirement and children have moved out from the home. Often moving to smaller homes and condos either here in Michigan or in a warmer climate. But today baby boomers are changing that pattern and bucking traditions.
“They have refused to follow what the traditional expectations were,” says Barbara Risman, a sociology professor at the University of Illinois at Chicago.
Why Are Seniors Saying No to Downsizing?
There are a few different factors influencing less downsizing from baby boomers.
First, many Americans are working longer in life and postponing retirement. About 20% of Americans 65 and older are working or looking for jobs, according to Labor Department figures.
Also, some millennial children are staying in the home longer so there is less reason to move into a smaller home if their family continues to utilize all of the home’s space.
Then combine this with a tight housing market with limited entry-level or less expensive homes. This only drives up the prices making downsizing even less attractive.
Fifty-two percent of boomers say they’ll never move from their current home, according to a Chase bank survey of 753 boomer homeowners released earlier this year.
How Do Baby Boomers Affect the Housing Market?
With more baby boomers delaying downsizing or forgoing downsizing all together, this only increases the housing shortage, providing even less options for buyers.
But since seniors are experiencing a shortage in starter-size homes, they are not solely responsible for the housing shortage, and are feeling the impact of a tight housing market themselves.
Another study from Fannie Mae’s Economic and Strategic Research Group predicts that downsizing could actually cause a housing bust as there will be too many homes unloaded on the market with not enough homeownership demand from younger generations. But this prediction is still ten years away, as seniors are still delaying downsizing, often not leaving their homes until they need medical attention or a senior facility.
Learn More: How Will Baby Boomers Affect the Housing Market?
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