One of the biggest challenges in today’s housing market is the lack of available homes for sale.
Several options have been floated as potential solutions, like building more homes, turning commercial properties into apartments and changing laws to allow more construction in suburban areas.
There’s also the much-heralded possibility of a housing “Silver Tsunami” — a persistent theory from some industry insiders that a wave of older homeowners will soon start downsizing and selling their homes, adding some much-needed stock to the housing supply. I’ve heard about this (supposed) upcoming flood of homes since at least 2018. But so far, it's only been a ripple.
According to a recent report from Redfin, empty nesters — parents, largely baby boomers, whose kids have grown up and moved out — own about 28% of all homes with three-plus bedrooms. And most of them aren’t selling. Meanwhile, millennial parents (who could very much use the extra space) only own about 14% of all large homes.
The irony is that, despite paying higher mortgage rates, older generations had it a lot easier when it came to being able to buy a sizable home — most boomers were at the peak of their careers when they bought their house, and home prices were more affordable. And the amount of equity they've gained in the decades since is substantial, which would help offset the high cost of borrowing and home prices in 2024.
But a significant portion of boomer homeowners have already paid off their mortgage, or are close to paying it off, and don’t want to use all their equity just to move into a smaller house. Many are still leading active lives with friends and family, and are reluctant to leave homes where years of cherished memories have been made.
Still, caring for a house is hard work, and it only gets harder as time passes. Maintenance costs can also be a financial strain, especially if the home is older and needs expensive upgrades like a new roof. Downsizing could help reduce expenses.
I recently asked my 93-year-old empty-nester father, who still lives in his three-bedroom home, why he doesn’t want to sell. His answer was simple: “I like my home. And I like the people around me.” I suspect there are other, more personal reasons, but he isn’t the most chatty guy.
Are there any empty-nesters out there who are deciding not to downsize or move? If so, I’d love to hear your story. Send me an email at leslie@money.com.
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