A new report from the Mortgage Bankers Association’s (MBA) Research Institute for Housing America (RIHA) takes a closer look at the shifting demographics for older Americans over 50 and the impact on the nation’s housing supply.
The report, authored by Gary V. Engelhardt, Professor of Economics in the Maxwell School of Citizenship and Public Affairs at Syracuse University, and Faculty Associate in the Syracuse University Aging Studies Institute, found that as older Americans continue to remain living in their homes for longer, and the homeownership rate for Americans over 50 continues to increase, there will be more demand for older Americans’ homes over the next decade.
The report, titled “Who Will Buy the Baby Boomers’ Homes When They Leave Them? An Update,” provides updates to a 2022 study that examines overall housing supply in the U.S. and homeownership trends for Americans over 50. The paper provides further analysis on the increasing homeownership rate for Americans over 50, how the pandemic impacted housing decisions, and how supply is being impacted by increased life expectancy.
“The findings highlight the varying patterns for older Americans as shifting demographics, the pandemic, and overall buyer attitudes have impacted buying and selling decisions,” said Dr. Edward Seiler, Executive Director for RIHA, and MBA’s Associate VP of Housing Economics. “It is evident that older households are aging in place, leading to updated predictions that show that there will be no excess supply of homes to the markets from older Americans moving or dying over the next decade.”
According to the RIHA study, as of 2022, Boomer homeowners numbered 32 million, and represented nearly 41% of all homeowners in the United States.
Key Findings of the Study
- Supply is a function of population mortality, the homeownership rate, cohort size, and the manner that older homeowners dispose of their housing assets as the age and die.
- Since 2015, there has been a sizable increase in the homeownership rate among those Americans 70 and older. This, combined with a larger base of older Americans from the aging of the Baby Boomers, has led to a greater number of existing homes held onto for a longer period of time.
- In contrast, pre-2015 homeownership patterns would have predicted that more of these homes would have been sold.
- Older Americans are holding onto their homes longer, and there are more of them. Many have found themselves priced out of the market, as Freddie Mac reports the 30-year fixed-rate mortgage (FRM) has risen for the past five weeks, currently sitting at 6.72% for the week ending October 31, 2024. And affordability remains an issue as Zillow notes the average U.S. home value is currently $359,892, up 2.7% year-over-year.
Breaking Down the Details
The cumulative number of additional homeowners by age between 2015 and 2022 based on American Community Survey (ACS) data shows:
- From age 50 to 65, the number of owners decreased then rebounded, as homeownership rates for these ages were slightly lower in 2022 than in 2015.
- After 65, homeownership rates are higher in 2022 relative to 2015. The increase in ownership rate combined with a higher base of 65-70-year-olds in 2022 means that there were almost 2 million more homeowners 70 and younger in 2022 than in 2015.
- Moreover, there will be seven million more homeowners ages 65-85.
- It is projected that there will be more than eight million homes supplied by older Americans as they age and die, rising to nearly nine million over the next decade, of which approximately one million will be due to the death of older Americans.
- Over the next decade, there will be an excess demand for homes for sale as older homeowners age and die. Overall, there will be no demographic dividend to the net supply of existing homes.
Click here to read the RIHA’s full report “Who Will Buy the Baby Boomers’ Homes When They Leave Them? An Update.”
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