More seniors are opting to age in place rather than relocate later in life, and it has contributed to the supply shortage that’s hampering the housing market.
According to a study by Freddie Mac, seniors born after 1931 are staying in their homes longer than previous generations, and they are gumming up the works, leaving Millennials shut out of the market.
The study revealed that seniors held 1.6 million houses back from the market in 2018 – responsible for a significant portion of the 2.5 million shortage in housing units that has impacted the market.
According to the study, seniors born between 1931 and 1941 have prevented 1.1 million homes from hitting the market, while those born between 1942 and 1947 have held onto 300,000 homes.
Baby Boomers, born between 1948 and 1958, are still occupying 250,000 homes, but a pending wave of retirees among this generation is likely to alter this figure.
This trend toward aging in place – furthered by better health and higher education among the older generation – is likely to increase over time as technology and health care make it easier for the elderly to stay at home.
“The amount of homes retained by seniors is likely to grow as both the number of seniors increases and the barriers to staying in place are reduced,” the study concluded. “This highlights the importance of addressing barriers to the production of new housing supply to accommodate long-term housing demand.”