Not all Baby Boomers are looking to downsize, according to the latest research from The Demand Institute, which finds a significant amount of the World War II-born generation may actually upsize their living spaces as they enter retirement — and take out new mortgages to do so.
While most Baby Boomers plan to age in place, 37% have plans to move from their current home, data show. And 47% of those looking to move are looking for nicer homes and more space. In fact, boomers will spend $1.9 trillion on new home purchases and $500 billion on rent in the next five years, The Demand Institute finds.
The organization surveyed more than 4,000 Baby Boomer households about their current living situation, moving intentions and house preferences for the report.
Many boomers have had to adapt their retirement and housing plans to new financial realities after the financial crisis and housing crash, but they will still account for nearly $1 out of every $4 spent on home purchases and rent in the next five years.
And when it comes to retirement, Baby Boomers are still retiring or planning to retire when they reach their mid-60s — ready or not.
Fewer than half of Boomer households are retired today, but a majority will be retired five years from now, data show.
“With median assets of $240,000 — more than half of which is tied up in their homes — many Boomers still have a ways to go [before they are ready for retirement,” The Demand Institute says.
Of the 63% of boomers who prefer to age in place, 62% report living in the same home for 10 or more years and 85% say they’re staying in their current home by choice, rather than financial or other circumstances.
But the homes in which many boomers prefer to age in place may not be aging-friendly, data show, with only 27% of those homes being accessible for special needs and disabilities. Three quarters of boomer households have already suffered a major health incident or have a chronic health condition.
Access the report here.
Written by Cassandra Dowell