As a result, empty-nest Baby Boomers own 28% of large homes — and Milliennials with kids own just 14%, according to a Redfin analysis released Tuesday. Gen Z families own just 0.3% of homes with three bedrooms or more…
This is a change from the historical norm, according to the research. Ten years ago young families were just as likely as empty nesters to own large homes…
For those who own their home outright, the median monthly cost of owning a home, which includes insurance and property taxes, among other costs, is just $612, according to the report.
“Logically, empty nesters are the most likely group to sell big homes and downsize,” said Bokhari. “They no longer have children living at home and don’t need as much space. The problem for younger families who wish their parents’ generation would list their big homes: Boomers don’t have much motivation to sell, financially or otherwise.”…
This speaks to one of the assumptions of American housing: older adults are expected to move out of larger homes and move to smaller homes or ones that better suit their needs later in life. This frees up their homes for the next generation to move into.
Is this the way it has always worked? Might patterns change heading into the future?
Several thoughts on these trends:
- Americans like bigger homes. As the size of American homes has increased, might Americans want to keep these larger homes as long as possible?
- Houses are places to live and strategic investments. Older residents may not need all that space but wouldn’t they want to cash out as late as possible on this large asset?
- An emphasis on living independently and youthfully may mean that staying in a house is a sign of vitality (while moving would be a sign of weakness). Why sell if you can still live in a big house?
This could be the product of a unique confluence of factors in recent decades: a sizable birth cohort, a change in what housing is and what housing is available, and an unprecedented growth in housing values.
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