Are the baby boomers to blame for the housing shortage?
Much has been written about how millennials aren’t buying as they were expected to. However, according to a recent survey and report from realtor.com®, baby boomers’ level of content with their homes, and the desire to stay there, is the reason there is less inventory on the market.
Nearly three-quarters of homeowners 55 and older said their home fits their current needs, and 85 percent have no plans to put their homes on the market in the next year. Sixteen percent said low interest rates and 13 percent said concerns about financial security were leading them to stay put. Homeownership among baby boomers is at 78 percent.
Across generations, 59 percent of homeowners are not planning to put their home on the market in the next 12 months. However, 35 percent reported they are planning to sell their home. Interestingly, 60 percent of potential sellers are millennials, with 25 percent planning to upgrade to a larger home, and 24 percent wanting a home with nicer features. However, millennial homeownership is only at 41 percent. Of the millennials planning to stay put, 52 percent said it was due to the fact that their current home fits their needs, while 27 percent cited recently purchasing their home. Sixteen percent said low interest rates.
However, more millennials selling will likely lead to more starter homes on the market.
“The housing shortage forced many first-time homebuyers to consider smaller homes and condos as a way to literally get their foot in the door,” said Danielle Hale, chief economist for realtor.com® in a release. “Our survey data reveals that we may see more of these homes hitting the market in the next year, but whether these owners actually list will depend on whether they can find another home.”