Looking for someone to blame for the years of low inventory that have pushed housing prices higher and made it harder for millennials to become homeowners? While builders share some of the responsibility, recent research by Freddie Mac finds that people between the ages of 67 and 85 who stay in their homes longer and “age in place” also play a role.
Fewer Americans ages 67 to 85 are leaving their homes than their predecessors. Homeownership rates dropped 3.6 percent among people born between 1931 and 1941 when they reached 67 compared to 11.6 percent among those born before 1930 when they reached that age.
Freddie Mac’s researchers estimate that the “aging in place” trend accounts for about 1.6 million houses held back from the market through 2018 by homeowners born between 1931 and 1959. Those 1.6 million houses equal about a typical one-year supply of new construction or more than half of the current estimated shortfall of 2.5 million housing units.
Seniors keep their homes longer for several reasons, according to the researchers, including better health and higher levels of education than previous generations. In addition, improvements in health care and technology that make aging in place easier help today’s seniors keep their homes longer and are likely to continue the pattern in the future.
Researchers found that older Americans prefer to remain where they are because they’re satisfied with their homes, their communities and their quality of life.
In addition, the researchers estimate that the number of homes retained by seniors will increase in the future as the baby boomer generation ages. Because there will be more seniors and anticipated improvements in health care and technology, that will make it even easier for them to stay in their homes.
The solution for the housing shortage, according to the study, is to reduce the barriers that slow housing production in an acknowledgment of increased demand.