Posted on 04/18/2024 12:31:09 PM PDT by TigerClaws
Among the many hard truths for those trying to enter America's brutal housing market, here's one: Baby boomers continue to own many of the country's large houses, even after their households have shrunk to one or two people.
Baby boomer empty nesters own twice as many of the country's three-bedroom-or-larger homes, compared with millennials with kids, according to a recent analysis from Redfin. That means those larger homes aren't hitting the market, one factor limiting the supply for the younger generations who could use those extra bedrooms.
Some baby boomers, the generation now between the ages of 60 and 78, are happy in their large homes, using the extra bedrooms for hobbies and visiting family. Others say they want to downsize, but it just doesn't make sense financially.
Some want to downsize, but the numbers don't add up
Sherry Murray, 73, and her husband, 80, bought their house in the North Hills of Pittsburgh in 1991, for $240,000. It's got four bedrooms, including some they don't use anymore. Many of her friends are in the same boat.
"What a lot of us have done is not walled off the extra bedrooms, but closed the doors, and you try not to have to maintain them," she says. "It's just too much house at this point."
The house is paid off, and Murray has wanted to downsize for a while, but she says homes that fit what she's looking for – 2,000 square feet, all on one level, in the same suburban area – sell quickly and for a lot of money.
So they've stayed put.
"You don't want to be economically stupid. If my house is worth even $650,000, I don't want to spend $1.1 million to downsize substantially, knowing that on top of that, I'm probably going to have to pay some [homeowner association] fees," she says.
Smaller homes can cost more if they're newer, or are part of a community that provides extra services. Some metro areas have few one-story homes, making them hot commodities.
Some homeowners are also affected by what's known as the mortgage lock-in effect. While 54% of baby boomer homeowners own their homes free and clear, according to Redfin, most of those with mortgages have low rates. So it doesn't make much sense to take out a new mortgage, with rates now around 7%.
"It just is a dumb economic decision to spend that much extra money for getting so much less," Murray says.
Across the country, many baby boomers are facing their own version of this calculus: It can be cheaper — and more appealing — to stay in their current, large house, than to sell it and move to something smaller.
This doesn't only affect younger buyers.
"You've got a pure housing mismatch for older homeowners. They are mismatched physically or functionally with the house that they're in," says Gary Engelhardt, an economist at Syracuse University who studies aging and housing markets. "That's because it's multifloor living. It's stairs. It's also other upkeep."
Engelhardt says that's a serious concern because it can can lead to things like falls. "And falls can be very devastating, could have very devastating health consequences, especially for the oldest old," he says. "In general, we would like to have older homeowners ... matched with their housing in a much better way than we currently have."
So what could be done?
Engelhardt says there are basically two policy approaches to deal with what's happening.
First, he says, is to provide subsidies or tax credits for home modifications that allow older adults to age in the homes they have. While that could make seniors' current housing safer, it doesn't put those houses back into the market.
Second, encourage building housing that's well suited to older Americans, Engelhardt says: "You promote the construction of new residential units that are going to be ADA compliant, that are going to have universal design and all the types of features that lend themselves to a better match of functionality at older ages."
For instance, the government could create a tax credit to encourage developers to build accessible housing, akin to the Low Income Housing Tax Credit that incentivizes building affordable housing.
Jenny Schuetz, a housing policy expert at the Brookings Institution, says in trying to incentivize older adults to move out of homes that are now too large for them, different tools are needed depending on their geography and financial resources. For instance, a lower-income homeowner of a deteriorating row house might be willing to a swap for a newer, smaller apartment in an elevator building, if there was a program for that.
But longtime California homeowners who've seen their property values skyrocket would likely require a different approach, Schuetz says. There, Proposition 13 strictly limits increases in property taxes – so that many longtime homeowners pay taxes on a small fraction of their home's value. That created its own lock-in effect, though a recent rule change allows those over age 55 to keep their lower tax rate if they buy and move into a home of equal or lesser value.
Building more housing that's attractive to seniors
There are other policy changes that could make it easier to build housing for different life stages and thereby entice boomers to downsize.
"I think one of the things that we know to be true is that older adults want to be able to age in their communities," says Danielle Arigoni, managing director for Policy and Solutions at National Housing Trust. That's where they already have friends and neighbors, doctors and bus routes they know — familiarity that makes aging in their community possible.
Comrade, let’s start with that vapid new NPR CEO’s abode or abodes.
only up to $250,000 if filing alone, or $500,000 if filing jointly.
many of these seniors purchased these homes decades ago and are sitting on millions in equity.
Scenes like that were why people used to be willing to fight communism …
No, census record, property assessments.....plenty of room? Stand by for room mates. Who won’t contribute to maintaining the residence.......
Come on out a say what you really mean Karl! How can the Collective force the Boomers to vacate their homes for the Greater Good?
I live in a two bedroom house in which one bedroom isn't used. I keep the door closed. It's almost completely empty of everything that was in it. It's just being used now to store a couple of things and that's it. I got the rest of my belongings stored in nine boxes, except of course for items used to cook and eat with. I even got rid of some older PC equipment.
In my older age, and because I'm disable due to Long Covid, I've downsized greatly in the past 4-5 months and I'm ready to move into a smaller place once I can find one. I nice little one bedroom place would suit me just fine.
when my mom had to go to the loony bin my dad sold our family home the only one we ever knew and got a one bedroom apartment down the street from where mom was it was his decision not anyone eless
Colorado just passed a “bring all the Mexicans you want” law.
tenants.
“Neighborhoods are just going to go downhill,” she added.
Jon Goldman of the Daniels Welchester Neighborhood Association in Jefferson County said an over-occupied home had ruined a cul-de-sac in his neighborhood, leading other families to move out.
The home “has seven mailboxes displaying 20 names, and the county says there is nothing that can do,” he told lawmakers.
Get rid of the Boomers to make way for their shock troops.
The problem seems to be with the supply of houses.
No sense in expecting Boomers to sell their house for less than it’s worth. That’s just silly. No one would do that regardless of what year they were born! Lol.
3D printed homes en mass are going to be a thing at some point.
In general, the leftists are the wealthy ones living in girnornmous houses and not having enough children.
Perhaps NPR is collaborating with Venezuela or Cuba.
This boomer never owned a home. I raised my two sons alone in apartments. That’s all I could afford at the time. By the time I could have afforded a house, I didn’t need or want one. At least neither of them will have to deal with getting rid of a house when I’m gone.
We finally worked our way up to the home of our dreams 10 years ago, and we have frequent houseguests, so I don’t give a rat’s patootie what some bureaucrat thinks what should do with it. Tough beans! We plan to live out our years here.
I have relatives that purchased land waaaaay outside of Austin back in the 70’s and built a small modest house on a small piece of land...
Now that house is practically downtown and worth 3-4 million minimum just for the land it is sitting on. They had their property taxes frozen for ages also.
Could be. This is more about changing demographics and getting rid of Boomers (white) to make room for illegal aliens.
Eventually they’ll just grab the house and pay whatever they want. If anything.
Baby Boomers who support Democrats should just give them to some lovely undocumented illegal alien invaders.
Market forces.
Everyone living alone in a studio or one bedroom apartment should be made to share their place(and their bed) with someone of the opposite(or same) sex. Market forces will then lower the rents on all properties. Plus everyone will be a whole lot happier!
AirBnB and Blackrock have lots of homes. Maybe they could sell theirs. A five bedroom does not make a starter home. There are not too few homes. There are too many people investing in homes.
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