Baby boomers prolonging housing shortage by aging in place

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SEATTLE — Baby boomers are staying put — and prolonging the housing shortage as a result.

A new report from Redfin, a technology-based real estate brokerage, finds that 78% of older American homeowners are considering or have already made the decision to stay in their current home as they age. Another 20% of Boomers are considering or have moved to a 55-plus community. Other options on the table are moving in with adult children, going to an assisted living facility or bunking with friends.

More than half of baby boomers who aren’t planning to sell say it’s because they like their homes and have no reason to move. About one-fourth (27%) have completely or almost paid off their home, while another 21% said they aren’t moving because home prices are too high.

Because housing inventory is at historically low levels currently, Redfin’s analysis points to baby boomers’ plans as a key reason younger people are having difficulty finding a home to buy. Empty-nest baby boomers own nearly one-third of three-bedroom-plus U.S. homes compared to millennials with children who own just 14% of those homes.

The report said Boomers have an outsized impact on the housing market because about 80% own the homes they live in, while just 55% of millennials own homes.

“Older Americans are aging in place because it makes financial sense,” said Daryl Fairweather, chief economist for Redfin, “but also because it’s human nature to avoid thinking about challenging scenarios such as needing help as you get older. In reality, many homeowners and renters will need to move somewhere that better meets their needs as they age.”

However, said Fairweather, “the government isn’t prioritizing building housing for seniors, which is further encouraging older Americans to stay put, exacerbating the inventory shortage.”

The Redfin survey was conducted in February by Qualtrics and polled a nationally representative sample of about 3,000 U.S. homeowners and renters. This report focused on the responses from people age 60 and older who owned their own home.