Close Close
Sign In
Newsletters
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
Podcast Center Video Center Webcasts Resource Center Events
About ThinkAdvisor Contact Us Advertise With Us Asset & Logo Licensing Sitemap Terms of Service Privacy Policy Copyright © 2024 ALM Global, LLC. All Rights Reserved.
ThinkAdvisor
A house sitting on an insurance policy

Retirement Planning > Spending in Retirement > Lifestyle Planning

Older Homeowners Plan to Stay Put in Retirement: Survey

By Michael S. Fischer

X
Your article was successfully shared with the contacts you provided.

What You Need to Know

  • A survey says that 70% of Gen X and baby boomer homeowners plan to or already have retired in the home they currently own.
  • Their plans to keep their homes could significantly affect residential home inventory in the future.
  • Despite this, older homeowners are helping younger generations take steps toward owning a home.

Seven in 10 homeowners in the Gen X and baby boomer age groups say they plan to or have retired in the home they already own, according to new data from Bank of America, released Thursday.

Among those who plan to remain in their homes when they retire, 78% see no reason to move, while 22% say they have put so much work into their home that they do not want to move. In fact, 61% of Gen Xers and 69% of boomer homeowners reported that they have renovated or remodeled the home they currently live in, adapting them to fit their lifestyles.

These findings are significant because 70% of the 84.7 million owner-occupied homes in the U.S. belong to Gen Xers and boomers. Their plans for staying put in retirement can greatly affect residential home inventory.

BofA noted that active home listings fell from 1,468,901 units to 732,276 units between July 2016 and September 2022, a 50% decrease since realtor.com began tracking this data.

It said a decade of insufficient homebuilding has also exacerbated low inventory levels, with housing supply growing by just 6.7% from 2010 to 2020, according to U.S. Census Bureau data, roughly half the rate of the previous decade.

“While home prices are holding steady in many parts of the country, demand continues to exceed supply, and there is still room for inventory to catch up before the housing market is in balance,” Matt Vernon, head of retail lending at Bank of America, said in a statement. “The latest trends show that large populations of Gen X or baby boomer homeowners may not be selling anytime soon.”

Ipsos conducted the survey in mid-October among a nationally representative probability sample of 1,554 general population homeowners ages 45 to 76.

Homeownership Fits Into Retirement Planning

Pollsters asked not-yet-retired Gen X and boomer homeowners what they would do if they were retiring today, considering market conditions.

Thirty-two percent said they would remain in their current home to avoid today’s high home prices and interest rates. Twenty percent would stay in their current home because their current mortgage payment is low or they have already paid it off.

Only 10% said they would sell their home, either to find a home with a lower cost of living or to leverage the equity they have built in their home.

The current housing market shows that sellers don’t want to give up their low mortgage rates to purchase new properties, according to BofA Securities, which noted that about 95% of current mortgage holders benefit from loans with rates of 5% or less.

Similarly, older homeowners may be less inclined to sell and rent their homes because this adds a fluctuating cost that can be challenging for retirees with a fixed income. In fact, the BofA Institute found that median rent payments increased by 8.1% year over year in September.

Helping the Next Generation

Although many older homeowners may have no plans to sell their homes in the near future, they are actively helping the next generation take steps toward homeownership, according to the survey.

Thirty-eight percent of respondents who plan to support younger prospective homeowners said they will give them money to buy a home or give them their home to sell.

Thirty-six percent will pass down their home for the next generation to live in, and 12% will offer to live together in a multigenerational space.

Gen Xers and baby boomers in the survey also plan to use home equity to achieve personal goals, which include living out their retirement dreams, investing the earnings or completing home renovation projects.

Michael S. Fischer

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.