This article was originally posted by The MReport and can be found here.
An editorial by the Los Angeles Times looks at the possibility of the housing market being derailed by the Baby Boomer generation.
Freddie Mac reported that there are more than 67 million U.S. homeowners are over the age of 55—owning about two-thirds of all U.S. home equity. Additionally, 63% of these homeowners plan to age in place while the rest expect to move at least once.
Seventy-one percent of those who expect to say they will rent rather than buy.
The Times stated another repeated concern is that boomers who do plan to sell their homes and rent could strain the availability of affordable rental housing.
“The size of the baby-boomer generation could create an influx of older renters that will make rental prices unaffordable for younger households,” according to the Los Angeles Times.
Additionally, the Los Angeles Times says that one thing that “boomer-shaming stories” don’t point out is that housing supply adjusts to changes in demand.
“Although a lack of adequate supply is always a big concern, today the metro areas with the greatest job growth are also leading the way in entry-level construction,” the report says. “And when supply is scarce, areas previously not used for residential housing often are repurposed, as with L.A.’s Arts District or the massive rail-yard conversions that took place in Jersey City.”
Zillow reported in November that the number of homes to become available in the market by seniors aged 60 or older will rise from 920,000 from 2017 to 2027 and 1.7 million per year from 2027 to 2037—more than 27% of today’s owner-occupied homes becoming available by 2037.
The Boomer generation once stood at 76 million and today, a third of America’s homes are owned by those 60-years-old and older. Nearly 20 million homes could become available in the next 20 years.
The report states that retirement hubs like Florida and Arizona are expected to feel the most significant impact.
“If demand erodes because fewer people choose to retire there in the coming years, those areas might end up with excess housing,” the report states.
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