Boomers own 38% of America’s homes — but more than half never plan to sell

Homebuyers hoping for a flood of homes to hit the market from aging baby boomers may be disappointed by the results of a new survey.

Among boomers who own homes, 54% say they don’t plan to sell the home they live in, according to a survey by Clever Real Estate.

Now in the age range of 60 to 78, boomers make up 21% of the US population, yet they own 38% of the nation’s homes, according to Freddie Mac data from 2022.

Their disproportionate hold on the housing market is understandable as home ownership rates tend to increase with age, up to a point.

Historically, these rates begin to decline at age 75 as homeowners begin to downsize, with many eventually moving in with family or into assisted living facilities.

But apparently most young people have no interest in reducing their numbers as they age.

That’s despite the fact that nearly two-thirds of boomers who own homes said they expect to make more than $100,000 if they sell their home, while 40% expect to clear $200,000 or more.

Explaining their reluctance to sell before they die, more than three-quarters of homeowners say owning a home is the main reason they are financially secure.

And nearly half said they would consider themselves a failure if they didn’t own a home.

If boomers are to be believed, their reluctance to sell their homes could reverberate through the housing market for years to come.

Constraints in the supply of homes for sale have been a major issue in the US housing market, pushing home prices to a new record high over the summer.

The supply of homes for sale at the end of July was 1.33 million units, which is equivalent to a four-month supply at the current pace of sales, according to the National Association of Realtors.

Although that’s up 20% from a year ago, it remains well below the six-month supply that economists say represents a balanced market.

“Any additional reduction in the supply of existing homes that results from older generations holding on longer would be unwelcome news,” says Realtor.com Senior Economist Joel Berner. “The supply of new homes, on the other hand, would make up a larger share of the sales market in this scenario, and buyers may find new construction more affordable.”

The survey also found that only 47% of young people said they had required two incomes to buy their own home, a figure Berner called “striking.”

Half of boomers who own a home said they bought their first for $75,000 or less, while nearly two-thirds (64%) paid less than $100,000, the survey found. And only 6% of emerging homeowners said their biggest challenge when buying their first place was that homes were too expensive.

While these numbers do not account for inflation and wage growth, they paint a picture of a generation that faced fewer barriers to home ownership than young buyers today, as high home prices, high mortgage rates and the supply of limited combine to create conditions. difficult for first-time buyers.

“The financial environment that younger generations are facing as first-time homebuyers is very different from what their parents and grandparents faced,” says Berner. “However, it is unclear whether the 54% of a generation of homeowners who report that they will live in their home until they die will have a significant impact on the supply of existing homes. Regardless of the severity of this specific challenge, prices of houses relative to income are a major obstacle for young families.

Despite this, 42% of respondents said they believe younger generations have it easier than buying a home in their 20s.

In their defense, for a period of years in the late 1970s and early 80s, rising home prices and mortgage rates in the high teens combined to create the worst home buying conditions in history, as were many young people in their late 20s. and early 30s.

However, in that case, conditions improved significantly after a few years and supply was not a major constraint for new home buyers. It’s unclear whether a similar solution is in the cards for new first-time buyers today.