HW Media connects and informs decision makers across the housing economy. Professionals rely on HW Media for breaking news, reporting, and industry data and rankings. Moving the Housing Market Forward.
NewsReverse Mortgage

Baby Boomers Not Showing Any Signs of Downsizing

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