Baby Boomer Challenge: Find a Home for Downsizing 2021-11-09
Gulf Coast Real Estate Update
November 9th, 2021
Baby Boomer Challenge:
Find a Home for Downsizing
The inventory for homes smaller than 1,400-square feet has hit a 50-year low – and it’s the same record-low inventory eyed by many first-time buyers.
Too much yard, too much cleaning? Older homebuyers shopping for a smaller home that’s easier to maintain struggle to find enough possibilities in today’s housing market. It makes downsizing increasingly difficult.
With so few smaller homes available, baby boomers may have to change their expectations when downsizing.
About 28% of real estate transactions in 2020 were for people looking to downsize, Yun says. Most of those transactions were for buyers aged 55 or older. However, some baby boomers choose to age in place and retrofit their current home so they can stay there longer.
Higher costs could also mean more seniors carry mortgage debts. The number of older homeowners with debt increased from 33.2% in 2007 to 55.4% in 2019, and most of the increase is attributed to mortgage debt, according to the Urban Institute.
Source: The Wall Street Journal (Oct. 31, 2021)
Mortgage Rates Climb & Fall
While mortgage rates fell after several weeks on the rise, we expect future upticks due to stronger economic data and as the Federal Reserve pulls back on its stimulus. That said, the housing market remains favorable for consumers, as rates remain below pre-pandemic levels and continue to support sustainable purchase and refinance opportunities.
