Housing Supply to Remain Tight as Older Americans Age in Place
Washington, DC, November 6, 2024-As older Americans continue to remain living in their homes for longer, and the homeownership rate for Americans over 50 continues to increase, there will be excess demand for older Americans’ homes over the next decade as shifting demographics impact housing for homebuyers of all ages. This is according to an updated research report by the Mortgage Bankers Association's (MBA) Research Institute for Housing America (RIHA) examining shifting demographics for older Americans over 50 and the impact on housing supply.
Who Will Buy the Baby Boomers’ Homes When They Leave Them? An Update, RIHA's study, provides updates to the 2022 study that focuses on overall housing supply in the United States and homeownership trends for Americans over 50. The paper provides further analysis on the increasing homeownership rate for Americans over 50, how the Covid-19 pandemic affected housing decisions, and how supply is being impacted by increased life expectancy.
Key findings of Who Will Buy the Baby Boomers’ Homes When They Leave Them? An Update include:
- Supply is a function of population mortality, the homeownership rate, cohort size, and the manner that older homeowners dispose of their housing assets as the age and die.
- Since 2015, there has been a sizable increase in the homeownership rate among those 70 and older. This, combined with a larger base of older Americans from the aging of the Baby Boomers, has led to a greater number of existing homes held onto for a longer period of time.
- In contrast, pre-2015 homeownership patterns would have predicted that more of these homes would have been sold.
- Older Americans are holding onto their homes longer, and there are more of them.
- The cumulative number of additional homeowners by age between 2015 and 2022 based on American Community Survey (ACS) data shows:
- From age 50 to 65, the number of owners decreased then rebounded, as homeownership rates for these ages were slightly lower in 2022 than in 2015.
- After 65, homeownership rates are higher in 2022 relative to 2015. The increase in ownership rate combined with a higher base of 65-70-year-olds in 2022 means that there were almost two million more homeowners 70 and younger in 2022 than in 2015.
- Moreover, there will be seven million more homeowners ages 65-85.
- It is projected that there will be over eight million homes supplied by older Americans as they age and die, rising to about nine million over the next decade, of which approximately 1 million will be due to the death of older Americans.
- Over the next decade, there will be an excess demand for homes for sale as older homeowners age and die. Overall, there will be no demographic dividend to the net supply of existing homes.