According to a recent study conducted by Chase, 76% of Baby Boomers—the generation born between 1946 and 1964—own their own homes. What’s more, they’re not planning to retire elsewhere.
Possibility of Renovations, Thanks to Reverse Mortgage Options
Thanks to reverse mortgage loans, older homeowners can leverage the equity of their homes to finance repairs and renovations. With the option of taking out a reverse mortgage, 88% of Baby Boomer homeowners are planning to renovate their homes within the next three years and stay there for their retirement.
Mary Kay Buysse, Executive Director of the National Association of Senior Move Manager, stresses that it’s essential to remember resale value. Baby Boomers who made updates to their homes via renovations can make homes more attractive to and—in the long run—more affordable for younger buyers.
According to Chicago real estate agent Alejandro Trujillo, nearly two-thirds of Baby boomer homeowners plan to make renovations soon. However, many feel that “if a house has been good enough for them, it should be good enough for the next generation.”
What Steadfast Baby Boomers Mean for First-Time Homebuyers
The housing market relies on older consumers selling their homes for constant movement. As fewer and fewer Baby Boomers seem to be flocking to retirement communities, the first-time homebuyers may have fewer options.
The Chicago Tribune reports that both first-time homebuyers and Baby Boomers may need to be more flexible about what they want in a home to pay mind to resale value.
According to Senior Move Consultant, Jennifer Prell, “The big houses aren’t selling because Millennials don’t want them and the little houses aren’t selling because seniors won’t move.”
Experts are calling Baby Boomers’ resistance to move “near-gridlock,”and estimate that this pattern is keeping 1.6 million houses off the market. Baby Boomers’ love for their current homes is causing a backup in the market, leaving many young homebuyers with few options.