Although the preferences of younger buyers will ultimately shape the future of the housing market, homebuilders must also pay attention to the housing needs of Baby Boomers and the challenges they face when buying a new home, a recent study suggests.
Homeownership is one of the most important life decisions a person can make, regardless of demographic or generational background. While Boomers and Millennials may not necessarily see eye-to-eye on music or the latest fashion craze, housing may be the one thing both generations can agree upon, according to the results of a recent survey from the National Association of Home Builders.
When buying a home, buyers of all ages say they are looking for homes with separate laundry rooms, energy-star appliances and windows, exterior lighting and a patio—to name a few preferences highlighted in the survey of potential homebuyers.
“What they don’t want are rooms with cork flooring, elevators, pet washing stations, expensive outdoor kitchens and fireplaces, and two-story entryways and family rooms,” noted NAHB. “And their countertops should be granite, but never laminate.”
In terms of housing type, 65% of all buyers said they want a detached, single-family home. This sentiment rises to 72% among Gen X-ers (born between 1965 and 1979, but falls to 55% among adults born before 1945.
The NAHB survey, which was conducted online, was sponsored by top-10 industry lender Reverse Mortgage Funding, in efforts to better understand the home buying preferences of Baby Boomers and older adults, and how a reverse mortgage, particularly the Home Equity Conversion Mortgage for Purchase (H4P), may help them with their purchasing decisions.
“The boomer generation is currently experiencing a transition to their next phase of life, so the home building and finance industries should commit to better understand the wants and needs of this generation to offer the best possible solutions for them,” said RMF President David Peskin in a prepared statement.
In a previous announcement, RMF said it hoped to use its involvement in the survey, as well as its attendance at NAHB’s International Builders Show this week in Las Vegas, as a means to raise awareness of the HECM for Purchase product not only for homebuilders, but economists and personal finance professionals, too.
“Our presence at this marquee event will help these parties understand and appreciate how a Home Equity Conversion Mortgage for Purchase loan can increase the buying power of older Americans, providing them with the financial flexibility to purchase the home they really want, including the amenities they need or desire,” said RMF’s Chief Marketing Officer Jean Noble back in November, when the company first announced its involvement with the survey.
The H4P, considered by some as the “sleeping giant” of the reverse mortgage industry, presents a huge opportunity in the senior real estate market. However, the H4P market remains largely untapped, and for a number of reasons.
Perhaps by better understanding the personal preferences of older homebuyers, and having a place at the table during national trade shows, the industry may finally be able to drum up some more awareness and interest in the H4P product.
“The results of this important survey shed light on the buying preferences of older Americans, and confirm that an uneasiness over finances is one of the primary reasons they are hesitant about relocating to a new residence that better suits their needs,” Peskin said. “At RMF, we are committed to helping home owners age 62 and older meet their financial needs, so this data will be informative to the way we educate consumers about our Home Equity Conversion Mortgage for Purchase product.”
Written by Jason Oliva