Baby Boomers comprise one-quarter of the U.S. population but they own two-thirds of the housing wealth – about $8 trillion. The decisions they make in the coming years will significantly reshape our housing market. Because of this, Freddie Mac asked nearly 6,000 55+ homeowners and renters about their future housing plans. We had a chance to sit down with our chief economist Sean Becketti to hear about some of the Boomer myths the survey busted.
Q: Let's start at the beginning. Why are Baby Boomers so influential when it comes to housing?
Becketti: We're talking about 67 million people who are having – and will continue to have – a significant impact on affordable housing inventories, home prices, and the transition of America's housing stock from one generation to the next.
Q: What was the biggest finding?
Becketti: Nearly two-thirds (63 percent) of Baby Boomers want to age in place, whereas 37 percent plan to move at least one more time. When deciding whether to move and where to live, 41% of 55+ homeowners say less maintenance is “very important,” and 30% say not having to care for property is “very important.” But downsizing isn’t necessarily the goal. Only 20% say it’s “very important” for their next move be about downsizing.
Q: What were some of the top myths dispelled by the survey?
Becketti: That Boomers are going to downsize – as soon as they ditch their kids in the basement. More than half (56%) of those surveyed say it’s “not at all likely” that their children will move in with them in the next five years. In fact, only 15% of 55+ homeowners have adult children over 18 living with them.
So does this mean that their ageing parent are moving in? No. More than 80 percent of those 55+ say it’s “not at all likely” that their parents will move in with them in the next five years.
And while we’re on the subject of boomerang children, our research found that the “Bank of Mom and Dad” is not necessarily the primary source for those who want help buying a home of their own. Fourteen percent of 55+ homeowners who have not provided down payment assistance say they are “financially able but would not be willing” to help an adult child with a down payment.
Q: So are all Boomers going to retire to Florida and Arizona to play golf?
Becketti: Those who can afford it are headed West or South – away from the snow. However, grandkids trump golf in terms of relocation. In retirement, nearly 20 percent of Boomers said they would move closer to their grandchildren/children compared to 13 percent who said they would move to a warmer climate.
Q: As a Boomer yourself, were there any surprises?
Becketti: I was surprised by the small share of respondents who were helping their children with a down payment on their first home. I know I couldn’t have purchased my first (and second) home without assistance from my family. When we previewed these results with housing economists from other organizations, they all had the same reaction I did.
Sean shares more findings from the Freddie Mac 55+ Survey in Executive Perspectives.