The number of 65+ households is projected to increase by 35% in 2020 according to a recent Harvard University housing report. The Joint Center for Housing Studies (JCHS) says in The State of the Nation’s Housing Report that baby boomers will continue to have a huge effect on the housing market as they approach retirement age.
“The baby boomers have dominated housing market trends at each stage of their lives—first as children in the households that were part of the great wave of suburbanization, then as young adults entering the housing market for the first time, and most recently as middle-aged households trading up to bigger and better homes and helping to fuel the homeownership boom of the 1990s and 2000s,” says JCHS. “As they approach retirement age, the baby boomers will once again heavily influence overall housing demand…Over the next decade, it is much more certain that the baby boomers will boost the number of senior households to unprecedented heights.”
Although most baby boomers will want to age in place upon retirement, says JCHS, it pointed to a report showing that more than 30% of household heads aged 65-74 said in 2007 that they had moved in the previous ten years, many into smaller units.
“If the older baby boomers match this mobility rate, some 3.8 million would downsize their homes over the coming decade, lifting the demand for smaller units,” the report reads. “Their sheer numbers also mean that the baby boomers will have a major impact on the housing markets of preferred retirement destinations, which so far have been the non-metropolitan areas in the South and West.”
The report showed that since many young adults are reluctant to establish their own households in favor of remaining in their parents’ homes, the baby boomer generation will deeply impact age distribution of households, as it’s a much larger group than the previous generation and will add significant volume to the senior population. JCHS says most baby boomers will end up either aging in place, downsizing, or moving into senior housing as they reach retirement age.
As for geographic locations, JCHS says many boomers have moved out of cities in favor of relocating to the lower housing costs that can be found in the suburbs. According to the report, the suburban senior population will grow by millions in the next 20 years, and seniors will remain in these homes to age in place. JCHS lists reasons for this which include being forced to continue working past typical retirement age due to eroded retirement savings or home equity, retiring in stages where one spouse remains in the work force because of age differences, or wanting to stay close to grandchildren.
Read the full report.
Written by Alyssa Gerace