70% of GenX, Baby Boomers Plan to Stay Put in Retirement

(Photo courtesy KENSS.)

Bank of America, Charlotte, N.C. said its data show 70% of Gen X and Baby Boomers—who account for 70% of the 84.7 million owner-occupied homes in the country—are planning to stay where they are, not just for now, but into retirement.

The company’s 2022 Homebuyer Insights Report found of these, 78% said they see no reason to move, while 22% say they’ve put so much work into their home that they don’t want to move. Sixty-one percent of Gen X and 69% of Baby Boomer homeowners have renovated or remodeled the home they currently live in, adapting them to fit their lifestyles.

“While home prices are holding steady in many parts of the country, demand continues to exceed supply, and there is still room for inventory to catch up before the housing market is in balance,” said Matt Vernon, Head of Retail Lending with Bank of America. “The latest trends show that large populations of Gen X or Baby Boomer homeowners may not be selling anytime soon.”

This means fewer homes added to today’s already-low inventory, the report said. Active home listings fell from 1,468,901 units to 732,276 units between July 2016 and September 2022, according to Realtor.com – a 50% decrease since they began tracking this data.

“The current housing market shows that sellers don’t want to give up their low mortgage rates to purchase new properties,” the report noted. Bank of America Securities reported nearly 95% of current mortgage holders benefit from loans with rates of 5% or less. “Similarly, older homeowners may be less inclined to sell and rent as this adds a fluctuating cost which can be challenging for retirees with a fixed income,” the report said.

Lack of homebuilding has also exacerbated low inventory levels. Research shows that housing supply has only grown 6.7% from 2010 to 2020, roughly half the rate of the previous decade, according to BoA.

However, the report said those closer to retirement are aware of the problem and said they are “actively helping the next generation take steps toward homeownership” by:

–Giving the next generation money to buy a home or give them their home to sell (38%)

–Passing down their home for the next generation to live in (36%)

–Offering to live together in a multigenerational space (12%)

Gen X and Baby Boomer homeowners are also planning to use home equity to achieve personal goals, the report found. This includes using the equity in their homes to live out their retirement dreams (16%), invest the earnings (12%) or complete home renovation projects (7%).