While most Baby Boomers are choosing to “age in place”, a report from the National Association of Home Builders (NAHB) and the MetLife Mature Market Institute (MMI) found that more than 1.2 million households are choosing to move to communities designed to meet their needs.
According to the report, by 2010 the Boomers will represent one–quarter of the U.S. population. “The Baby Boomers’ influence on housing choices has been profound, and will have a huge impact on trends in housing for the mature market as that age group continues to move toward retirement,” said Sandra Timmermann, director of the MetLife Mature Market Institute. “Some findings, such as the tendency for buyers in 55+ communities to continue to work in greater numbers and for longer periods of time, show us that this group is redefining the traditional notion of retirement.”
The report showed that while most 55+ consumers prefer to stay in their current homes as they age, an increasing number (3 percent, compared to 2.2 percent in 2001) will opt for age-restricted communities designed to attract “active adults” with a heavy emphasis on lifestyle. The analysis also confirmed that while most consumers were generally happy with their current homes, residents of age-restricted active-adult communities had the highest satisfaction rates.
The report noted that those who were residents of multi-family dwellings often sought less expensive homes. Of the Baby Boomers who are close to the traditional retirement age of 65, many are not yet planning to retire, are looking for a community close to their place of employment, or one that allows them to transition into a work-from-home situation. The number of people who chose a community close to work increased from 11.4 percent in 2001 to 16.6 percent in 2007.
And while there is increasing interest in age-restricted housing among mature adults, the number of units being built has decreased with the downturn in the economy. Not coincidentally, sales of new homes for active adults have fallen off as interested buyers either cannot sell their current homes, or simply decide to wait for a more stable market.
Other key findings from the study:
- Main reasons for moving to a 55+ owner-occupied community were family or personal reasons, financial or employment reasons, and the desire to have a higher quality home. In multi-family communities, family was the number one reason, but reducing costs and increasing quality were also top priorities.
- Within the community, design and looks were most important to 55+ single-family home buyers, while closeness to family and friends was a higher priority in age-restricted rental and multi-family communities.
- Home and community location relative to work location are important for 55+
households. Proximity to work as the reason for choosing a community among 55+ movers into single-family detached homes jumped from 11% in 2001 to 17% in 2007. In addition, the number of 55+ households working from the home rose rapidly over the six-year period. The number of movers into other 55+ owner-occupied communities rose from 6% in 2001 to 13% in 2007.
- Active adult communities are attracting younger buyers (age 60 and under).
- Female-headed households dominate the multi-family and age-restricted rental market.
- The share of home buyers in age-qualified communities with some college education or more has increased in the past six years, from 50% in 2001 to 73% in 2007.
- The share of all 55+ buyers of newly built homes using a mortgage has increased significantly in the past six years, except for other 55+ communities which declined from 54% in 2001 to 40% in 2007.
- The projected number of housing starts in 55+ communities will fall in 2009 as the economy continues to weaken and prospective buyers find it difficult to sell their current homes, but production will begin to revive in 2010.
- The share of minorities has trended upward in age-qualified and other 55+ owner occupied communities. The trend is likely to continue, and the 55+ housing market is likely to become more racially and ethnically diverse.
- Even though we would expect home value and home size to be related, this does not appear to be the case in 2001-2005. The overall rapid price appreciation across homes of all sizes during this period appears to be driving these results.