Baby Boomer Challenge: Find a Home for Downsizing
The inventory for homes smaller than 1,400-square feet has hit a 50-year low – and it’s the same record-low inventory eyed by many first-time buyers.
NEW YORK – Too much yard, too much cleaning? Older homebuyers shopping for a smaller home that’s easier to maintain struggle to find enough possibilities in today’s housing market. It makes downsizing increasingly difficult.
Housing inventories for homes up to 1,400 square feet have fallen to a 50-year low, according to Freddie Mac, even as a growing number of young couples and aging seniors are competing for them. Price growth has been highest for smaller, less expensive homes, says Len Kiefer, deputy chief economist at Freddie Mac.
With so few homes available in that category, baby boomers may have to change their expectations when downsizing.
“We have a housing shortage,” Lawrence Yun, chief economist at the National Association of Realtors®, told The Wall Street Journal. “Clearly from the age patterns, young people want to upsize, and the older generation is looking to downsize, but not greatly – only 100 or 200 square feet smaller than where they’d been living.”
About 28% of real estate transactions in 2020 were for people looking to downsize, Yun says. Most of those transactions were for buyers aged 55 or older. However, some baby boomers choose to age in place and retrofit their current homes so they can stay there longer.
Higher costs could also mean more seniors carry mortgage debts. The number of older homeowners with debt increased from 33.2% in 2007 to 55.4% in 2019, and most of the increase is attributed to mortgage debt, according to the Urban Institute.
Source: “As Boomers Downsize, Competition Grows for Simpler – but Not Always Smaller – Homes,” The Wall Street Journal (Oct. 31, 2021) [Log-in required.]
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