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Baby Boomers Are Driving Trend of Americans Staying Put a Lot Longer

by 9999biz.com
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Americans are staying in their homes twice as long as they used to — a trend largely being driven by baby boomers, who are opting to age in place as the housing affordability remains challenged. 

The median US homeowner is spending 11.9 years in their home, according to a Redfin analysis of US Census data. That’s nearly double the amount of time people spent in their homes in 2005, when the median homeowner tenure was just 6.5 years.

The shift is largely driven by baby boomers, the real estate listing site said, who are staying put as mortgage rates and home prices remain elevated. 

Around 40% of boomers who own their homes have stayed put for 20 years or more — far longer than Gen X homeowners, of which just 35% have stayed in their homes for 10 years or more.

Millennials and Gen Zers, meanwhile, are living in the same place for less time, due to being younger and switching jobs more frequently. Less than 10% of millennials and virtually no Gen Z homeowners have stayed in their homes for more than 10 years. 

More boomers aging-in-place also means that the generation is taking up large homes that millennials are in the market for. In 2022, empty-nester baby boomers owned 28% of homes in the US with three or more bedrooms, double the share that millennials with kids owned, Redfin said in a previous report.

“Older Americans are hanging onto their homes because they’re financially incentivized to do so. Most (54%) baby boomers who own homes own them free and clear, with no outstanding mortgage,” Redfin said in a note on Wednesday.

Mortgage rates have cooled in recent months, but borrowing costs are still elevated, with the 30-year fixed mortgage rate inching back up this week after a period of declines as markets eye higher-for-longer interest rates from the Federal Reserve. High rates have discouraged existing homeowners from listing their homes for sale, as many are looking to cling to the ultra-low interest rates at which they financed their homes years ago.

Scarce housing inventory has also helped push up home prices, another factor making today’s housing market more unaffordable and keeping people in place for longer. The median US home price was just over $402,000 in December, Redfin data shows, while the median monthly mortgage payment stood around $2,607. 

By comparison, boomers who have paid off their mortgage and own their homes outright pay around $600 a month in housing costs, Redfin said.

Affordability conditions are only expected to improve slightly this year as more homeowners opt to list and increase the inventory of homes for sale. 

“Moving forward, we expect homeowner tenure to stay flat or increase slightly for the foreseeable future. Existing-home sales hit a 15-year low last year, with many homeowners locked in by low mortgage rates, and while sales should pick up a bit this year, it’ll be more of a trickle than a flood,” the note said.

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