Owning a home is part of the American dream, or at least it has been. It’s a bit up in the air for the Millennials and while that gets sorted out, the Baby Boomers are still keen to own their own home. A US News story looked at seven housing trends for Baby Boomers which I’ve compressed into four.
- Nearly eight in 10 Baby Boomers own their own homes and almost nine out of 10 have owned one at some point in their lives, according to a study by the National Association of Realtors. Boomers own a whopping 26 million homes. While there is still quite a bit of discussion about whether it’s necessary to pay off a mortgage before retiring, most Baby Boomers have made paying off their mortgage as a primary goal.
- Equity is a big part of Baby Boomer wealth. Many Baby Boomers are looking at that wealth and thinking about making a change but whether they want to cut expenses by downsizing as the US News story suggests or they are looking for more attractive features (but definitely not looking to downsize) as Realestate.com suggests is probably still up in the air. What’s far more likely is that any moving they are likely to make will be closer to family or to amenities such as walkable communities and nearby coffee shops with Wi-Fi. Gone are the days of looking to buy on the golf course. Instead, they are looking for walking trails, parks, cultural and arts life. A Nielson study found that nearly two-thirds of Baby Boomers have no intentions of moving at all. Of those who do plan to move, 67 percent will stay in state, and over half will move with 30 miles of their current home.
- Baby Boomers account for $1 out of every $4 spent on new home purchases or rent. The Nielson study found that many Baby Boomers are still seeking their dream home. Nearly half want to increase the size of their home or find something of similar size. The other half plans to downsize by either buying a smaller home or spending less money on a house of similar size. Those looking to downsize are often looking to upsize by purchasing homes with high-end finishes or more community services and amenities. Most Baby Boomers recognize the need for having homes that require less maintenance and are looking at single story homes but most (69 percent) still want a yard or garden. Real estate agents can help address these concerns.
- Few Baby Boomers plan to move to age-restricted neighborhoods or homes. In addition, current studies indicate that Baby Boomers aren’t making a major shift from the suburb or the city. Those Baby Boomers expect to get any personal care within their own homes rather moving to where those services are provided.
It’s probably a tad bit too early to make predictions about the Baby Boomer retirements. Some of us won’t be retiring for nearly 15 more years and since Baby Boomers have largely written their own way so far, it’s not likely to change any time soon. Quite a few Baby Boomers have no intention of retiring or plan to postpone retirement. Those who continue to work will likely not transition their housing options until they’ve eliminated their work life. One thing just about everyone agrees with is that whatever Baby Boomers do, we’ll do it in numbers big enough and strong enough to make permanent changes to the retirement landscape. Let’s hope we get it right.
Housing is one of the most significant aspects of retirement planning. Come to a free seminar to see how housing decisions will affect the rest of your life.