It’s not likely there’ll be a wave of aging adults who will start downsizing from suburban single-family residences to urban multifamily residences in the near future. For Americans looking to buy, this could mean even fewer available homes for sale.
A June 12 report from mortgage lender Fannie Mae showed that while baby boomers are increasingly becoming empty-nesters, they’re not abandoning their single-family homes in droves. In fact, the share of boomers living in single-family homes was at least as high in 2012 as at any time since the onset of the housing crisis, the report showed.
This is because baby boomers are still some years away from the age of downsizing and older households today are less likely to downsize than older adults in years past, according to Jed Kolko, Trulia’s chief economist. Demographics are partly to blame as well for the trend, which isn’t really anything new, he says.
“The trend in more older households staying in single-family homes has been going on for decades, long before the recent housing bust caused homeowners to lose equity,” he says. “As seniors live longer and healthier for more years, they can stay in their homes longer.”
In addition to the fact that lost equity may have made it difficult or impossible to relocate, the Fannie Mae report also pointed out that baby boomers may simply just prefer to remain in their current residences for as long as possible.
Kolko says the growing preference for older Americans to live in single-family homes means that young people will continue to dominate demand for apartments in big cities.
“Especially now, as more young adults are moving out of their parents’ homes and looking to rent, the recent boom in urban apartment construction will depend on demand from young people,” he says.
This could also complicate the already worrisome homeownership picture: Homeownership for all age groups in the first quarter was 64.8 percent, the lowest it has been since 1995, and among Americans 35 and under, it was 36.2 percent, the lowest on record since the Census Bureau’s Housing Vacancy Survey began calculating homeownership by age in 1982.
“If older adults stay in their current homes longer, that could also reduce the supply of homes for sale,” Kolko says.