Now, a survey by The Demand Institute suggests Baby Boomers simply don’t care.
The nonprofit group, run by the Conference Board and Nielsen, polled nearly 4,000 Baby Boomer households (ages 50 to 69) last year about their future housing plans. It found that this generation won’t “stick to the script.” Most of them don’t plan to move, and if they do, they don’t necessarily plan to downsize. As for mortgage debt, they’ve still got it and they still see no problem with taking out a mortgage to finance the next home. In fact, they’re confident they can qualify for a new one even though it’s still tough to get a mortgage these days.
“This survey simply reflects what people are telling us their plans are,” said Jeremy Burbank, vice president at The Demand Institute. “In some cases, they’re planning ahead and being realistic, and in other cases, they’re not.”
Here are some of the poll results, which were released Thursday.
Most Baby Boomers plan to age in place. The majority of them have lived in their homes for at least a decade, and when they retire, they plan to stay put. Some will be forced to stay due to personal circumstances, such as financial hardship. But most prefer to age-in-place if given a choice.
For those who plan to renovate, age-friendly features are not a top priority. Three-quarters of the people polled suffered from a chronic condition or had experienced a major health problem. Yet 40 percent of boomers plan to tackle a major home renovation in the next three years, and they aren’t itching for handrails and such. Their wants are more closely aligned with those of the younger set.
Nearly half of Baby Boomers who plan move don’t want to downsize. Only 37 percent of those polled said they want to move. But a good chunk of them don’t plan to scrimp on size or space. More than half of Baby Boomers (58 percent) said they want at least the same size home they have now, if not bigger, when they move. About 48 percent said they plan to spend the same amount or more when buying their next home.
They want bigger and better. Those who want pricier or larger homes are the “upsizers.” About 46 percent of Baby Boomers fall into that category. But they’re not necessarily the most affluent of the generation. Rather, they’re the people who put off buying their dream home when the economic downturn hit. Some of them rent, and now want to own. But when they make the jump, they’re not going to spend lavishly. The median price of their next home will be $180,000.
The “downsizers” are the more affluent. They are the Baby Boomers who’ve been there, done that. They’ve lived in pricey, large homes (about 2,000 square feet on average) and they want a smaller home or one that’s less expensive than the one they’re in. About 54 percent of Baby Boomers are identified as downsizers. The median price for the next home they purchase will be higher than for “upsizers” — about $200,000 versus $180,000. This is clearly the wealthier subset of the Boomer generation.
City Life? Warmer climate? No way. The Harvard/AARP study established that the vast majority of older adults live in single family homes in the suburbs. This survey found that Baby Boomers who plan to move won’t go far. “There’s no shift to or from the suburb or the city,” Burbank said. “You’ve heard that the suburbs are going to get greyer, and we see that reflected in our research.” Only one-third of the older adults polled plan to move out of state. More than half will move within 30 miles of their current home. Very few (one in five) see senior-related housing or active adult communities in their future.
They still want to live in single-family homes, but also single-story. This generation still resists condominium life. Most Baby Boomers want to own a single-family home, though they’d prefer it be one-story. “Single story is a practical decision, but they’re not sacrificing style or other aspirations,” like a yard or garden, Burbank said. More than two-thirds of them still want that.
And the debt keeps piling up. Citing data from a Federal Reserve survey, the Demand Institute said Baby Boomers are more laden with mortgage debt than earlier generations at the same stage of life. The median outstanding balance on their mortgages has shot up 142 percent since 1992. The Boomers watched their wealth grow until the recession hit. “Just as they were expecting their wealth to accelerate, that’s when things took a u-turn,” Burbank said. If all had stayed on the pre-2008 track, the net worth of the typical Boomer household would be about 2.5 times what it is today. Still, Boomers who plan to move will account for $1 of every $4 spent on buying or renting homes in the next five years, when most of them will be retired. Half their assets are tied up in their homes.