There’s always been this idea that parents will move to a smaller home once their children leave the nest and spread their wings. But a new report by Trulia claims that empty nesters are shirking this ideal. Instead, baby boomers are choosing to stay in their homes for as long as possible, even when retirement looms on the horizon.
But why are baby boomers choosing to ditch downsizing? After all, selling a too-large home and moving into a more efficient living space can put thousands of dollars back in your pocket. This can cushion retirement costs and pad against other health issues that may arise in old age.
As boomers grow older, living in their own home may become impossible. Older folks are more prone to suffer from deleterious health issues, including diseases like Alzheimer’s. Something as simple as forgetting to clean the dryer vent could spell disaster for a homeowner. It’s estimated that 34% of dryer fires are caused by forgetting to clean vents and performing regular maintenance.
For the boomers who opt to sell their homes, they’re doing so much later in life. In fact, a recent report from USA Today notes that up to 52% of baby boomers hope to never move from their current home. Unfortunately, this rising trend is contributing to an increasing housing supply shortage throughout most of the country.
One of the main reasons boomers are putting off selling their homes is because they’re working for longer than previous generations. While the average security guard can make more than $30,000 per year, many boomers have been a member of their corporations for many years, accruing higher salaries in the process. Some have homes located within close proximity to their office space while others hope to continue working on side projects.
Additionally, boomers simply don’t want to give up the lifestyle that they’re used to. For example, a garage is just one of the many luxuries a boomer would have to give up if they moved into a smaller home or apartment complex. A hobbyist woodworker or auto mechanic needs a lot of space to account for larger projects and the appropriate compressed air systems. In fact, it’s estimated that up to 70% of manufacturers rely on this type of system.
With fewer baby boomers moving on to smaller homes, however, this contributes to low numbers of entry-level houses throughout the United States. This is bad news for Millennials who have to pay rising prices for otherwise less expensive homes.
And despite higher rates of education among Millennials, they’re still getting paid less than their older counterparts. It’s estimated that only one-third of Millennialsowned a home in 2016 and this trend is expected to continue, in part, due to the tenacity of boomers.
It’s no wonder that home sales fell throughout April in spite of falling mortgage rates. It’s estimated that sales were up to 4.4% lower in April of this year compared to April 2018.
This marks the 14th month in a row that U.S. home sales have fallen.
When boomers are finally ready to retire and downsize, up to 42% of boomers hope their new home is the same size or a comparable size to their old one. Boomers are waiting until their 70s to move into ranch homes which have become an increasingly popular option for boomers and Millennials alike. This is because they’re relatively affordable for Millennials while boomers love the accessibility of a single-story home.
Luckily, economic experts and realtors are optimistic about the future.
“We are seeing historically low mortgage rates combined with a pent-up demand to buy, so buyers will look to take advantage of these conditions,” notes NAR member, Lawrence Yun. “Also, job creation is improving, causing wage growth to align with home price growth, which helps affordability and will help spur more home sales.”
Yun and other economists are expecting falling rates to turn around in the upcoming months, even with more baby boomers staying in their homes. After all, it’s estimated that homeowners move every five to seven years on average. It’s recommended that boomers get the medical help they need should they start to find living autonomously impossible.