“ Older Americans who own their home are staying put largely because they ’ re financially incentivized to do so . It ’ s contributing to the shortage of homes for sale and is likely to continue to do so ,” Redfin said .

More than half of those baby boomers who say they aren ’ t planning to sell their

home anytime soon ( some 51 %) say it ’ s because they like that home and have no reason to move , according to the survey . More than a quarter ( 27 %) say it ’ s because their home is completely or almost paid off , and roughly one in five ( 21 %) are staying put because home prices are now too high , Redfin reported .

Some boomers are dreaming of moving to communities for those over 55 at the beach , in the mountains , in the desert or on a golf course . One in five baby boomers is considering moving into a “ 55-plus ” community or has already done so , according to the survey , which asked boomers to choose their top plans .

Just 10 % of baby boomers said that living with their kids was a possible plan . An equally small percentage of boomers said they planned to move to an assisted-living facility , while 6 % said they hoped to move in with friends .

The results from baby boomers who rent their homes are similar to those of homeowners , Redfin said .

The shortage of homes for sale will be prolonged by these baby boomer homeowners mostly planning to age in place , Redfin said .

Redfin added that 54 % of boomers who own homes have no mortgage , “ and for those who do have a mortgage , nearly all have a much lower interest rate than they would if they sold and bought a new home .”

Tax systems in states like California and Texas also make it financially beneficial for people to stay in their homes as they age , the firm reported .

“ Older Americans are aging in place because it makes financial sense , but also because it ’ s human nature to avoid thinking about challenging scenarios such as needing help as you get older ,” Redfin Chief Economist Daryl Fairweather said .

In reality , however , many homeowners and renters will need to move to housing that better fits their needs as they age , like a senior-living community or a one-story home in a neighborhood where groceries and other basics can be easily attained , Fairweather said .

The problem is “ the government isn ’ t prioritizing building housing for seniors , which is further encouraging older Americans to stay put , exacerbating the inventory shortage . Politicians should focus on expanding housing stock that meets the needs of older Americans , which could help with housing affordability and availability for all ,” she added .

The shortage of homes for sale will be prolonged by these baby boomer homeowners mostly planning to age in place , Redfin said .

“ Inventory is sitting at historically low levels ( though new listings have started climbing in recent months ) in large part because homeowners who scored ultra-low mortgage rates during the pandemic are staying put to avoid taking on a new rate at today ’ s elevated levels . Many of those homeowners are baby boomers ,” the firm said .

This has had a domino effect in which younger Americans can ’ t find a family home to purchase , Redfin said in a separate analysis . “ Baby boomers have an outsized impact on the housing market because they ’ re most likely to own homes : Nearly 80 % of boomers own the home they live in , compared to 55 % of millennials .”

More than half of baby boomers have lived in their home for over 10 years , which leads to low for-sale inventory , which in turn pushes home prices up , exacerbating the housing affordability problem in this country , Redfin said .

— Tracey Longo

10 | FINANCIAL ADVISOR MAGAZINE | MAY 2024 WWW . FA-MAG . COM