Boomer’s Impacting Today’s Housing Market
Baby Boomers have long been touted as the largest generation in the U.S. –until Millennials took over. Born between 1946 and 1964, a hefty number of Boomers have hit retirement age, but now they are staying more active than their predecessors and seem uninterested in retirement living.
Today’s retiree’s want options and choices that facilitate staying in their homes as long as possible, which is another big impact on today’s housing trends.
In fact, a Housing Shortage Study from realtor.com indicates part of the inventory shortage we’ve been experiencing is due to Boomers’ hesitancy to sell, and feeling that their home already fits the family’s needs. Consequently, a large share of properties are kept off the market and out of the hands of prospective buyers.
Possibly benefiting the inventory shortage, many first-time buyers have been forced to consider smaller homes and condos to get their foot in the door. With any luck, more of these homes will hit the market in the impending future as these owners decide to upsize to a new home.
In the study, approximately 85 percent of Boomers indicated they are not planning to sell in the next year. And, while down-sizing is on the minds of some boomers, they are reluctant to sell because of the same inventory shortages and price increases regularly reported in the news.
Nonetheless, experts expect the number of Baby Boomers getting out of the housing market to increase in upcoming years, and consequently the industry will need to ensure Millennial’s are ready to take on the supply of inventory.
It seems like Millennials are facing more home buying challenges and delaying family expansion, but the Federal National Mortgage Association (FNMA), (known as Fannie Mae), believes change is coming. New mortgage options with lower down-payment requirements and more flexible debt-to-income ratios are empowering them to become homeowners, and rising equity might help position more of them to purchase the homes vacated by Boomers.
In the end, as more and more Boomers downsize or otherwise vacate their homes, the potential for increased supply is large enough to balance price gains, making homeownership more obtainable for others.
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