More than 70% of baby boomers have no plans of selling their home even as they grow older, boxing out millennials, particularly those with children, who are looking for larger homes, according to a recent Redfin report.
In a survey conducted in February 2024, real estate firm Redfin asked baby boomers what they anticipate their living situation to be as they grow older. At least 78% of respondents said they plan to stay in their current home.
In comparison, 20% said they are planning or have already moved to a 55+ community, 10% said they are considering moving in with their adult children, 10% said they may move to an assisted-living facility, and 6% said they plan to move in with friends.
The result of the recent survey is similar to the result of a separate Redfin analysis, which found that empty-nest baby boomers own 28% of three-bedroom-plus homes in the United States. Millennials with children, on the other hand, own only 14%.
Why Baby Boomers Refuse To Downsize
One of the largest reasons why baby boomers are staying in place and refusing to downsize is today's elevated mortgage rates. As of last week, the rate for the 30-year fixed mortgage is 6.88%, while the rate for the 15-year loan is 6.16%, according to Freddie Mac.
Additionally, there is a financial incentive for many baby boomers planning to stay put. At least 54% of baby boomers who own homes no longer have mortgages. For those who do have a mortgage, nearly all of them have secured a much lower mortgage rate than they would if they sold their current home to buy a new one.
The plan to age in place by baby boomers could lead to a prolonged shortage of homes for sale on the market, which results in soaring home prices. Currently, supply is sitting at historically low levels despite a recent increase in new listings.
In addition to a lack of supply in the market, other factors that make it harder for millennials to buy a home include soaring higher education costs, student loan debt, and credit card debt.
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