Despite speculations of a fast-approaching shift in housing as baby boomers reach retirement age, most of them are unlikely to downsize anytime soon, according to a report released by Fannie Mae.
In fact, the number of boomers living in single-family detached homes actually increased slightly between 2006 and 2012 — about 38.3% of trailing boomers (born between 1956 and 1965) and 41% of leading boomers (born between 1946 and 1955) resided in these homes, up from about 37.9% and 40.7%, respectively, in 2006.
One reason behind this may be rooted in the steady decline in home values in recent years. The average value of an owner-occupied single-family detached home with a boomer householder decreased by 13% between 2006 and 2012, meaning that some of these homeowners are in a negative equity position on their mortgage, making it difficult to sell the home and move, according to the report, titled “Are Aging Baby Boomers Abandoning the Single-Family Nest?”
In 2006, the average estimated value of single-family detached homes stood between $300,000 and $310,000; in 2012, it dropped to less than $270,000.
“Declining home values and the recession-scarred economy have suppressed boomers’ residential mobility, thus slowing the rate at which they can adjust their housing consumption,” the report states.
Although the data suggests a delay in movement, the aging population will inevitably need to leave their homes, if not by their choice then as a consequence of deteriorating health, and when they move, the housing market will experience far-reaching implications.
To read the full report, click here.
Written by Emily Study