Americans 55 years old and up now own 53 percent of total owner-occupied homes in the country.
According to real estate firm Trulia, and the US Census Bureau, the baby boomer generation is staying longer in their homes. This has been the highest percentage recorded ever since the department established the study in 1900, the record holder being the 2006 data which registered 43 percent.
Case in point, the average seller in California has not moved in a decade and a good 71 percent of the state’s citizens who are aged 55 and above have been residing in their homes since 1999.
How did this happen?
Some experts believe the government’s retro tax bills and many homeowner-benefiting regulations have helped encourage them to settle in their residences for a long time.
But these couldn’t be the only reasons. Somehow, some sentiment was at play. Many homeowners remain wary of departing from a place they’ve owned for a long time. It’s more than just about taxes. Some even turn down money from offers to buy.
With this new data, many mortgage experts especially those in the reverse mortgage industry project that a boom could soon arise from the potential pool of senior homeowners.
Professional reps from the National Reverse Mortgage Lenders Associations cite laws as well as the scarcity in housing starts and low inventory to further push the realization of this possibility.
The scarcity, while favoring the reverse mortgage industry, is posing a big problem to millennials who want to initiate their dream of owning a home. Even when home prices have skyrocketed, demand still runs high, thanks to low mortgage interest rates.
Other millennials who can’t find deals online get creative and resort to other ways to strike a deal. Some even go as far as approaching some residents directly to inquire about the prospect of selling.
It’s an odd setup
Indeed! And one that is desperate for solutions. Will the inventory problem run through the entire year? What happens to home prices if it doesn’t? When is interest rate going to counter the demand?
With bubble scares, price hikes, and the problem with the pace of wage growth, we can only hope for the better.