Two decades ago, we finally could afford a home and moved with two kids to our suburban residential development, where all of our neighbors seemed to be “empty nesters.”
That created the logistical problem of ferrying kids to friends’ houses far afield, rather than sending them out to play next door or up the street.
While it took a few years, houses in the neighborhood started to turn over, and new families with kids moved in.
Now, though, it appears we’re the empty nesters, gumming up the works for another generation of would-be homeowners.
Or so says Freddie Mac, the government-sponsored enterprise known formally as the Federal Home Loan Mortgage Corp., which helps keep the home-lending market liquid.
In a report earlier this year, Freddie pointed a finger at several cohorts of “seniors” — including Baby Boomers — who are living in their homes much longer than similarly aged groups before them, keeping Millennial buyers on the sidelines.
Data published by the U.S. Census Bureau seem to echo that.
For the first quarter this year, the homeownership rate for Boomers aged 55 to 64 years stood at 75 percent, and for those 65 years and older, it was 78 percent, according to the Census Bureau. For Millennials aged 35 and younger, the first-quarter homeownership rate was 35.4 percent.
For years, the real estate community has been waiting for Millennials to start marrying and buying homes in the ‘burbs. But the 75 million-strong group, born between 1981 and 1997, has not formed households at the same rate or age as earlier generations.
Part of that has been blamed on high debt from college – Millennials are a well-educated lot – which has made saving for a down payment difficult. But lack of inventory also is a culprit.
Freddie figures that 1.6 million homes that could have come on the market in 2018 did not because seniors were staying put and renovating their homes so they could “age in place.”
“Older Americans prefer to age in place because they are satisfied with their communities, their homes and their quality of life,” says Freddie.
That contentedness was also cited in a 2017 survey by the website realtor.com, an affiliate of the National Association of Realtors, which identified Boomers’ “reluctance to sell” as one reason for low inventory nationally.
According to the survey, Boomers saw no near-term reason to sell since the economy was strong and home prices were rising.
(And, somewhat ironically, if they did want to sell to downsize, the survey said Boomers would face the same inventory shortages tripping up Millennials.)
Realtor.com said it is “the record size” of the two groups – Boomers, at 74 million, are almost as large as Millennials – that “is impacting the supply of inventory available on the market, and the stubborn demand for it.”
Marlene Kennedy is a freelance columnist. Opinions expressed in her column are her own and not necessarily the newspaper’s. Reach her at [email protected].