Much attention has been paid to millennials’ attitudes toward homeownership. Millennials recently overtook baby boomers as the largest living generation, meaning their decisions about homeownership will likely have a significant effect on the U.S. housing market.
Click here and here to read a couple of our previous blog posts focusing on millennials.
However, an article published by CNBC in August argues that it’s actually baby boomers—not millennials—that are having the greatest impact on today's housing market. Why? The article argues it’s because baby boomers are staying in their large suburban homes longer than previous generations. This trend prevents other homeowners from upsizing, which then reduces the amount of starter homes on the market for younger, first-time buyers.
How widespread is this phenomenon? A recent Trulia study found that baby boomers currently own about 3.6 million unoccupied bedrooms. And a recent Freddie Mac survey reported that one third of baby boomers intend to age in place, rather than downsizing to a smaller home or apartment. For reference, that’s nearly 25 million baby boomers that intend to stay put as they get older.
The CNBC article also lists several reasons why boomers are choosing not to move to smaller homes. Some are still housing their adult children. Others don’t want to move to “active adult” communities because they are often located far from city centers.
But the main reason baby boomers choose to stay is that it is just too expensive to move. Increasing competition is driving up home prices throughout the country. Without affordable alternatives, baby boomers are forced to remain in their larger homes, even when they no longer need the space. Brooke Heiberger, a Coldwell Banker real estate agent, explains the dilemma many boomers are facing:
“Baby boomers are really struggling with the decision to downsize because there are not really great options for them to downsize to. It’s just easier to stay where they are in absence of being able to make a good decision.”
How Down Payment Assistance Can Help
By offering a grant of up to 5% of the mortgage amount, TSAHC’s down payment assistance programs can help home buyers qualify for a larger mortgage when purchasing a home. More purchasing power equals more options for buyers searching for a home in their price range.
And while most people using our programs are younger, first-time buyers, everyone meeting certain requirements can qualify. Click here to see how TSAHC helped the Foxworths—a retired couple-- buy a home in Austin.
Want to learn more? Visit www.readytobuyatexashome.com to learn about our assistance options and take the eligibility quiz.
On the House blog posts are meant to provide general information on various housing-related issues, research and programs. We are not liable for any errors or inaccuracies in the information provided by blog sources. Furthermore, this blog is not legal advice and should not be used as a substitute for legal advice from a licensed professional attorney.