55+ers Poised to Have Significant Impact on Housing Market

With 55+ homeowners controlling almost two-thirds or $8 trillion of the nation's home equity*, the housing decisions they make in the coming years will significantly reshape America's housing market.

The first Freddie Mac 55+ Survey focuses on this 55+ generation of 67 million people because of the impact they are having, and will continue to have, on affordable housing inventories, home prices, and the transition of America’s housing stock from one generation to the next.

The overwhelming message in this first survey is that homeownership works and that 55+ers are confident as they head into retirement or are already there. Some of the key findings include the following.

Baby Boomer Homeowners Expect a Financially Comfortable Retirement

• Overall, 76 percent of homeowners over the age of 55 are confident they will have a financially comfortable retirement, according to the Freddie Mac 55+ Survey. Majorities in every demographic group surveyed share this confidence to varying degrees: African-Americans (77 percent), Hispanics (64 percent), Asians (80 percent), homeowners who are currently working (74 percent), as well as homeowners earning less than $30,000 (55 percent).

• The Freddie Mac 55+ Survey also shows consistently strong links between homeownership and a person’s satisfaction with their home, community and financial situation. Specifically, 59 percent of homeowners are “very satisfied” with their communities, 64 percent with their current home, and 54 percent with their quality of life.

• A majority also believe homeownership makes financial sense for most Americans.  Specifically, 96 percent feel homeownership makes financial sense for people who are either married with children or between 35-49 years of age. Smaller majorities said homeownership makes sense for people over 55 (87 percent), married couples without children (85 percent), single people with children (79 percent), and single people without children (53 percent).

• In terms of helping others become homeowners, nearly 25 percent of the respondents say they have already helped someone financially with a down payment.

Why Baby Boomers Drive the Housing Market for Millennials

• The Freddie Mac 55+ Survey also identified a number of other opportunities and challenges for the housing industry that will stem from the decisions Baby Boomers and other older homeowners make over the next few years.

• For example, 63 percent of the 55+ homeowners surveyed say they prefer to age in place if they had complete control over it. However, nearly 40 percent indicate they would prefer to move at least one more time. This suggests nearly 25 million homeowners over age 55 may move again. When asked when they expect to move next, 13 percent think they will move within four years.

• Of those homeowners who would consider moving, 12 percent believe their next home will be more expensive than their current one, while 37 percent believe it will be in the same price range, and half believe it will be less expensive. At the same time, 23 percent of homeowners say they would have to make major renovations in order to age in place.

• 55+ers cite cost and convenience as the top factors influencing whether to move and where to live: affordability of living in a particular community (46%); having the amenities needed to live there for many years after I retire (44%); Less maintenance (41%); proximity to other family members (31%); having a place where I was no longer responsible for caring for the property (e.g. yard work, snow removal) (30%); being in a walkable community (28%); having abundant services for adults my age (25%); access to public transportation (17%); warmer climate (19%); having a place that is smaller than my current home (e.g. downsizing) (19%).

Methodology

GfK conducted an online survey on behalf of Freddie Mac using the GfK KnowledgePanel^® from February 10-23, 2016. A total of 5,914 interviews were completed online, including oversamples of African-Americans, Hispanics and Asians, obtained through additional opt-in sample. Interviews were conducted in both English and Spanish. GfK's KnowledgePanel^® is the only large-scale online panel based on a representative random sample of the U.S. population. The margin of sampling error was +/- 1.27 percentage points for the full sample. Sampling error is higher for subgroups. See the report for the full methodology.

Today we are releasing our findings on 55+ homeowners. We are completing our analysis of 55+ renters and will release it once it is finished.

*2013 Survey of Consumer Finances