July 2016 - Lessons Learned

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58 | TH E M R EP O RT O R I G I NAT I O N S E R V I C I N G A NA LY T I C S S E C O N DA R Y M A R K E T ANALYTICS THE LATEST With almost 50 percent reporting that they intend to live with their parent or adult child in the near futures, this cohort is highly family-oriented. Retirees Poised to Alter Housing Industry These so-called "Innovators" are expected to remap the housing market in four major ways. L esley Deutch, Princi- pal at John Burns Real Estate Consulting, said in a report, "tomorrow's retirees will completely trans - form the housing industry." Ac- cording to the report, the retiree explosion began in 2012 and has only grown since that time. "We have done a tremendous amount of research on this group, all of whom were born in the 1950s," she said. "We call them the Innovators because they have created so many innovations throughout their lives." John Burns deemed this group to be innovators because they are tech savvy, which began with their space race fascination as kid. With almost 50 percent report - ing that they intend to live with their parent or adult child in the near futures, this cohort is highly family-oriented. In addition, re - tirees are more affluent than any prior generation of retirees. This is due to careers that perfectly coincided with a strong economy, a workaholic attitude that led to more double-income households and delayed retirement, 80 percent homeownership (with the major - ity having no mortgage today), and 30 years of falling interest rates boosting home values and retirement accounts. All of these aforementioned factors will play into the innova - tive retiree's next housing move. They will: Innovate retirement to be more about health, family, experiences, and continuing to work • Move several more times, including selling their home and moving into a rental in an urban area that is walkable to entertainment • Focus more on living near their kids, with huge rewards to the builders who sell multigenera- tional-living homes that satisfy Innovators' needs • Continue migrating south, but not just to the traditional retire- ment areas, as they will want to be near their kids and a job According to a newly released Rent vs. Buy Report from Trulia, retirees are stuck between decid - ing to buy a home or rent one once their working days are done. However, it all depends on the legacy they want to leave behind. Though nationally, the report shows that buying is slightly cheaper than renting on the whole, that's only if the retiree cares about leaving an inheritance for their loved ones upon death. If they don't care about the home equity they leave behind, the report shows that renting a home is actually the more affordable option in 98 of the top 100 U.S. cities for retirees. Millennials Largely Misunderstood New data reveal that fundamental changes in their marital status, education, and employment are the main driver behind their decision to live with Mom and Dad. F or the first time in modern history, millen- nials who live with their parents beats out other living arrangements. So why is this generation not leaving their parents' nest? New research from Pew Research Center shows that this group of young adults are not the generation that society characterizes them to be. Instead, demographic shifts in marital status, educational attainment, and employment have changed the way young adults in the U.S. are living. In 2014, for the first time in more than 130 years, adults ages 18 to 34 were slightly more likely to be living in their parents' homes than they were to be living with a spouse or partner in their own household, the research showed. The report found that 32.1 percent of millennials are living in their parents' homes, while 31.6 percent are married or cohabiting in their own household. Meanwhile, 14 percent head up a household in which they lived alone, were a single parent, or lived with one or more roommates, and 22 percent have other living arrangements. "This turn of events is fueled primarily by the dramatic drop in the share of young Americans who are choosing to settle down romantically before age 35," said Richard Fry, Senior Researcher at Pew. "Dating back to 1880, the most common living arrangement among young adults has been living with a romantic partner, whether a spouse or a significant other. This type of arrangement peaked around 1960, when 62 per - cent of the nation's 18- to 34-year- olds were living with a spouse or partner in their own household, and only one in five were living with their parents." Although the number of mil - lennials living at home seems high, it is not the highest it has ever been. In fact, Pew reported in 1940, this type of living ar - rangement peaked at 35 percent of the nation's 18- to 34-year-olds liv- ing at home with Mom and Dad. "What has changed, instead, is the relative share adopting different ways of living in early adulthood, with the decline of romantic coupling pushing living at home to the top of a much less uniform list of living arrange - ments," Fry said.

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