WASHINGTON, D.C. – October 30, 2014 – (RealEstateRama) — The iconic suburban, single-family American home isn’t going anywhere – and neither are their Baby Boomer owners. Contrary to common perception, the post World War II generation will not be trading home ownership for renting, suburbs for cities, or yards and gardens for more maintenance-free living. Rather, most Boomers will age-in-place, concludes a new report by The Demand Institute, while Boomer movers will account for nearly one in every four dollars spent on housing in the next five years.
The report, Baby Boomers & Their Homes: On Their Own Terms – released today by The Demand Institute, a non-advocacy, non-profit think tank jointly operated by The Conference Board and Nielsen – doesn’t expect this generation to “stick to the script” when it comes to retirement and housing decisions. The research, which surveyed more than 4,000 Boomer households (ages 50-69), reveals that few have intentions of downsizing or moving to warmer climates far from their families.
“During the financial crisis, Baby Boomers saw their wealth drop dramatically. While many have been forced to adapt their retirement and housing plans to new financial realities, they haven’t abandoned those plans entirely,” said Louise Keely, President of The Demand Institute. “For the most part, they are still retiring in their mid-sixties and staying in their homes. They value strong family relationships; they want to be near their children and grandchildren. Additionally, many Boomers maintain plans to upsize their homes.”
The next decade will see many Boomers taking on home remodeling projects, as they seek to update and increase the value of their homes. Nearly 40 percent plan for major home improvements in the next three years. Yet, according to the report, most continue to prioritize style over the amenities necessary for aging, such as lower maintenance and accessibility features. Those who do move are not interested in exclusive elder communities, and if they are, they will stay close to their current homes.
“Thanks to a host of factors – not the least of which is the Great Recession– Boomers’ nest eggs have shrunk dramatically in recent years,” said Jeremy Burbank, Vice President at The Demand Institute. “Financially, this generation is not necessarily ready for retirement, and half of their assets are tied up in their homes. Despite all of this, many Boomers will look to finance their housing aspirations. Their choices will have real impact on the housing sector in the next several years.”
According to the report, Baby Boomers are carrying much more mortgage debt than earlier generations at this life stage. Even so, most Boomers who will purchase homes plan to use mortgage financing to do so, and in contrast to Millennials, the majority is confident in their ability to qualify for financing.
Baby Boomers & Their Homes: On Their Own Terms is part of a broader Demand Institute-led initiative to understand where future home and community demand is headed. It is one outcome of an 18-month research program that includes in-depth interviews with 10,000 U.S. consumers, along with analysis of 2,200 cities and towns in America, and projections of the national and regional U.S. housing markets. These most recent findings on Baby Boomers offer insight into the short- and longer-term choices of retiring adults aged 50-69 to help business and policy leaders identify opportunities to better meet their needs and aspirations.
Download the report from The Demand Institute’s website: www.demandinstitute.org.
About The Demand Institute
The Demand Institute illuminates how consumer demand is evolving around the world. We help government and business leaders align investments to where consumer demand is headed across industries, countries and markets. A non-advocacy, non-profit organization and a division of The Conference Board, The Demand Institute holds 501(c)(3) tax-exempt status in the United States and is jointly operated by The Conference Board and Nielsen. For more information, please visit demandinstitute.org.
About The Conference Board
The Conference Board is a global, independent business membership and research association working in the public interest. Our mission is unique: To provide the world’s leading organizations with the practical knowledge they need to improve their performance and better serve society. The Conference Board is a non-advocacy, not-for-profit entity holding 501 (c)(3) tax-exempt status in the United States. For more information, visit conference-board.org.
Nielsen Holdings N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and related properties. Nielsen has a presence in approximately 100 countries, with headquarters in New York City and Diemen, the Netherlands. For more information, visit nielsen.com.
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