The baby boomer generation is again poised to impact the housing market, this time with the full thrust of its punch intertwined with the financial solvency of its members’ kids. A report last month from the Washington, D.C.-based Bipartisan Policy Center found that while the housing bust is complicating the anticipated spike in the size of the senior population, to which it adds masses of boomers daily, the market’s fate is linked to the homeownership ability of a group it calls “Echo Boomers.” This younger demographic, often boomers’ children, emerged from the recession with diminished incomes and dwindling job prospects, leaving them more likely to pay a monthly rent than take out a mortgage on a home.
As analysts talk of home prices hitting bottom, and as an increasingly disproportionate number of home-owning seniors look to sell and downsize, first-time buyers may begin to scoop up these properties. But industry experts agree that for the time being, seniors outnumber young, mortgage-worthy buyers, pushing the latter to hold back. The report notes that by 2030, baby boomers will have added 30 million people to the senior population, at which point the segment will account for 20 percent of the overall U.S. population, with two-thirds of this group being older than 85 years. Nate Berg writes for The Atlantic Cities that with 10,000 individuals in the U.S. turning 65 years old daily through 2020, where and how these seniors live will be important for monitoring shelter opportunities available to aging populations. The fact that the Echo cohort at best could add 18.8 million households on top of a 6.7 million household gain from other generational groups by 2020, according to the report, means the ball is in the remodelers’ court.
Rolf Pendall, the study’s co-author and director of the Metropolitan Housing & Communities Policy Center at the Urban Institute in Washington, D.C., says demand to match the caliber of senior-owned homes entering the market isn’t likely to pick up for another five to eight years. Meanwhile, seniors are turning to remodeling and retrofitting to make their homes compatible spaces for aging in place—a trend that represents a significant shift from the group’s historical impact on new construction, he says.