The biggest problem vexing the housing market remains a lack of homes for sale, and boomers deciding to stay put is fueling some of it.
Lack of inventory has been blamed in the past two years on so-called “rate lock,” or owners who are reluctant to give up their low mortgage rate to buy another home with a mortgage at a much higher rate than they have. But there are other reasons just as significant for older homeowners not selling.
“We’re seeing that more adult children are moving back home with their baby boomer parents, so keeping that bigger house makes sense,” said Lisa Sturtevant, chief economist at listing service Bright MLS. “But there are reasons outside of choices that baby boomers are making.”
“The fact of the matter is, even if somebody wanted to move and downsize, there is just nowhere for them to go.”
Multigenerational homes are on the rise, according to research by the National Association of Realtors, and not just adult children moving home. Many are aging parents moving in with their adult children.
Another reasons older homeowners are choosing to age in place, instead of downsizing, moving to warmer climates or choosing to embrace senior living settings, is because they’re renovating their homes to make that possible, often addressing the onset of physical limitations.
“If a homeowner embraced refitting their home for the intention of aging in place, that could help them stay put for a longer time,” said Jessica Lautz, vice president of research at the National Association of Realtors.
Beyond physical improvements, technology is making it easier for aging homeowners to remain independent.
“This population of folks who are now in their mid-70s are looking for ways to age in place, so as there are advancements, it is making it easier,” Sturtevant said.
A recent National Association of Realtors survey found 43% of homeowners age 68 to 76 said they never intend to move from the home they currently own. A Redfin report shows empty nest boomers own 28% of large single-family homes, defined as those with three bedrooms or more, compared to 14% of millennials with children.
There are still reasons for homeowners, both younger and older, to sell, even if it meant giving up a low, legacy mortgage rate. Marriage, children, health and relocating for a job among them.
Most forecasts see inventory levels improving in 2024, but perhaps not by much.
Zillow predicts inventory will remain much lower than pre-pandemic norms this year, even with more homes hitting the market.
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