Seniors Aging in Place Keep 1.6 Million Housing Units Off Market
MBA NewsLink Staff
Freddie Mac, McLean, Va., said seniors choosing to age in place is a significant contributing factor in the shortage of available homes for young adults buying their first homes.
Freddi Mac estimated 1.6 million million more senior households are staying in place than would have been the case if they had behaved like previous generations of homeowners. The 1.6 million units equates the number of new single-family and multifamily housing units built each year and represents more than half of the current shortfall of 2.5 million housing units Freddie Mac previously estimated.
"This further highlights the importance of addressing barriers to the production of new housing supply to help accommodate long-term housing demand," said Sam Khater, Chief Economist with Freddie Mac "We believe the additional demand for homeownership from seniors aging in place will increase the relative price of owning versus renting, making renting more attractive to younger generations."
The report said seniors born after 1931 are staying in their homes longer, and aging in place, resulting in higher homeownership rates for this group relative to previous cohorts. Freddie Mac estimated 1.1 million existing homes have been held off the market through 2018 by those born between 1931 and 1941, with another 300,000 held off the market by those born between 1942 and 1947 and another 250,000 held off the market by "Baby Boomers" born between 1948 and 1958.
Khater said the trend of seniors aging in place is likely to grow as both the number of seniors increases and the barriers to aging in place are reduced. "More older Americans prefer to age in place because they are satisfied with their communities, their homes and their quality of life," he said.