Moving Boomers Want a Bigger, Pricier Place
Over the next five years, analysts estimate that baby boomers will purchase about $1.9 trillion in homes. But the key question is: Will they be able to afford to move?
“Their choices will have a real impact on the housing sector in the next several years,” says Jeremy Burbank, vice president at the Demand Institute, a nonprofit think tank run by the Conference Board and Nielsen.
The Great Recession caused the average boomer’s household net worth to shrink to $143,000 in 2013, from $200,000 in 2007, according to Federal Reserve data. Boomers are also carrying more mortgage debt than previous generations. The median outstanding mortgage balance for 50- to 69-year-olds was $118,000 in 2013, up from $48,743 in 1992.
“Boomers’ nest eggs have shrunk dramatically in recent years,” Burbank says. “Financially, this generation is not necessarily ready for retirement, and half of their assets are tied up in their homes.”
As a result, the majority of boomers say they don’t intend to move when they retire. Sixty-three percent of boomers say they plan to stay in their current home, according to a survey of 4,000 baby boomer households by the Demand Institute.
But 37 percent of baby boomers say they do plan to move in retirement, and many of them have no intentions of downsizing. Nearly half of those who say they plan to move say they want a bigger place and they intend to spend more money on it, according to the survey. That said, the majority of boomers who say they want a bigger place have a net worth of $40,000 and were among the lowest income bracket surveyed.
On the other hand, the majority of boomers who say they plan to move to a smaller home tended to be more affluent with a net worth of $322,000, according to the Demand Institute.
Regardless, the majority of boomers say they are unconcerned whether their next home is “age friendly,” even though three-quarters report having significant health issues, like cardiovascular conditions or arthritis.
Also, only one in five report that they intend to move into senior housing.
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