Housing Trends Among Baby Boomers
76 Pages Posted: 21 Oct 2009
Date Written: December 1, 2006
According to the most recent U.S. Census Bureau projections, most of the growth in the number of persons aged 55 and older in the near future will occur because of the aging of the Baby Boomers, who have helped to fuel the growth in the national homeownership rate to historical highs. Broadly speaking, the aging of America and growth in homeownership will have potentially important implications for the housing and mortgage industries for a number of reasons. First, listings by older homeowners are an important source of supply of existing homes for sale, and those older sellers looking to buy another home represent an important source of demand, especially for smaller, trade-down homes or homes with desirable features - e.g., homes with a first-floor bedroom, one-story homes, and condominiums - and in current and future areas of growth in retirees, especially in the West, South, and Southwest. Second, there has been a sustained increase in the demand for second and vacation homes, as well as lots for the building of future retirement homes. Third, there has been recent media attention on empty-nesters selling suburban homes in areas with good schools and purchasing real estate in urban areas to take advantage of urban amenities. Finally, the housing equity of older Americans, which was estimated to be $2.5 trillion in 2000 and has grown even larger in the last few years, is the most important non-pension asset in household portfolios, and a large reserve of untapped wealth. Indeed, there has been substantial interest in the development of new mortgage and financial-market products which allow older homeowners to tap into this wealth. Overall, issues involving housing and aging will be of growing national importance and will have direct bearing on the housing and mortgage industries.
Keywords: Boomers, Second Homes, Housing, Aging, Retirement
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