While Seniors Age in Place Millennials Wait Longer and May Pay More for their First Homes
Seniors choosing to age in place—staying put in their current homes—are creating a barrier to young adults buying their first homes, according to Freddie Mac’s February Insight. About 1.6 million existing homes are being held off the market due to seniors’ decision to age in place and remain in their current home, the report notes.
Researchers note that those 1.6 million units are roughly the same as the number of new single-family and multifamily housing units built each year, and it represents more than half of the current shortfall of 2.5 million housing units, which Freddie Mac has estimated is missing from housing market inventories to accommodate population growth.
“We believe the additional demand for homeownership from seniors aging in place will increase the relative price of owning versus renting, making renting more attractive to younger generations,” warns Sam Khater, Freddie Mac’s chief economist.
Freddie Mac researchers estimate that 1.1 million existing homes have been held off the market through 2018 by those born between 1931 and 1941. Another 300,000 have been held off the market by those born between 1942 and 1947, and an additional 250,000 are being held off the market by baby boomers born between 1948 and 1958.
“The trend of seniors aging in place is likely to grow as both the number of seniors increases and the barriers of aging in place are reduced,” the report notes.
Meanwhile, a separate report from the Urban Institute notes that 3.4 million millennials are currently missing out on homeownership. As seniors stay put longer, younger adults need more options to get into homeownership, economists say.
“This further highlights the importance of addressing barriers to the production of new housing supply to help accommodate long-term housing demand,” Khater says.
Psst,
This post was authored by local resident and REALTOR, John Womeldorf. John is known around town as Mr. Williamsburg, for both his extensive knowledge of the Williamsburg/ Hampton Roads/ Richmond VA area and his expertise helping buyers and sellers in the local real estate market. If you are a homeowner searching for someone innovative to sell your home I would love to share my thoughts on marketing.
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John