Baby boomers are still fond of their single-family homes after retirement

June 16th, 2014

Despite a prevailing trend of retiring individuals moving into smaller, urban multifamily homes, many boomers are staying in their single-family residences.

A lot of attention has turned toward the housing habits of baby boomers as many in this generation reach traditional retirement age and exit the workforce. Earlier reports have shown that many favor all-cash home purchases rather than getting another mortgage during their golden years. While their preferred financing is already understood, which type of property fits their needs?

Fannie Mae reported that many baby boomers - who were born between 1946 and 1964 - are prepared to stay in a single-family home during retirement. For years, the perception has been that retiring individuals drop their larger suburban properties in exchange for smaller, urban multifamily residences once all of their children have finally moved out. However, the nearly 10,000 boomers who reach retirement age every day have different desires.

“Despite these life transitions, one key metric of Boomer housing consumption – the proportion of the population residing in a single-family detached home – has yet to decline,” the report said. “In fact, contrary to the downsizing perception, the percent of Baby Boomers residing in single-family detached homes was at least as high in 2012 as at any time since the onset of the housing crisis.”

Why are boomers hanging on to larger properties
According to HousingWire, there are three reasons this generation has changed the trend:

  1. They can’t find available properties. During the housing recovery, inventory has been tight, prompting many boomers to remain owner-occupants rather than seek out another residence. Many fear they won’t find a home to spend their retirement in, and some are also afraid they won’t find buyers who want their current property. As such, between 2006 and 2012, the share of boomer householders who moved the previous year declined from 10.2 percent to 7.9 percent.
  2. They don’t want to leave their home. Citing data from the AARP, HousingWire said that 90 percent of boomers want to stay in their property as long as possible.
  3. The economy isn’t favorable. Many boomers saw their property values decline in recent years, as the average price of an owner-occupied single-family home with at least one boomer householder dropped 13 percent between 2006 and 2012. Some of these homeowners are underwater or struggling to regain lost value, making it harder to sell.

Given these factors, boomers may not be as much of a force in the housing market as previous reports would suggest.