BofA Survey: 70% of Gen X and Baby Boomers Retiring in the Home They Own
Gen X and Baby Boomers account for 70%1 of the 84.7 million owner-occupied homes2 in the United States, so their plans for homeownership in retirement can greatly impact residential home inventory. New data from Bank of America (PDF) found that 70% of homeowners ages 45 to 76 plan to or have retired in the home they already own.
Among those planning to stay in their homes when they retire, 78% see no reason to move, while 22% say they’ve put so much work into their home that they don’t want to move. In fact, 61% 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.
With more people staying in their homes and fewer selling them, active home listings fell from 1,468,901 units to 732,276 units between July 2016 and September 2022 – a 50% decrease since Realtor.com began tracking this data.3 A decade of insufficient homebuilding has also exacerbated low inventory levels – with housing supply growing only 6.7% from 2010 to 2020, roughly half the rate of the previous decade.4
Matt Vernon - Hi, I’m Matt Vernon, Head of Retail Lending at Bank of America and I’m pleased to share the findings from our latest research.
Every year, our Homebuyer Insights Report explores consumer preferences and behaviors to better understand the goals and challenges facing homebuyers and homeowners.
This time around, we’re putting the spotlight on Gen X and Baby Boomer homeowners to uncover the way they are looking ahead to retirement.
These generations account for 70% of the 84.7 million owner-occupied homes in the United States so they clearly represent a large portion of our current homeowners.
More than two-thirds of this group homeowners aged 45 to 76 either plan to or have already retired in their current homes either because they like them or because they have put so much work into them that they don’t want to move.
While Gen X and Baby Boomer homeowners won’t be creating home inventory anytime soon, many are actively helping the next generation take steps toward homeownership in other ways.
These generations will give money to their children to buy a home or give them their home to sell.
An additional 36% will pass down their home for the next generation to live in and 12% will offer to live in a multigenerational space.
More than anything, for the seasoned homebuyer, deciding how home fits into your broader financial picture in retirement can be an emotional decision do you keep the place where you’ve built so many memories or sell and use the earnings toward other retirement goals?
There is no one size fits all answer, but a Bank of America Lending specialist can help you better understand your options, from how they approach downsizing to how to responsibly use the equity in your home.
To learn more visit BankofAmerica.com
“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,” shares Matt Vernon, Head of Retail Lending at Bank of America. “The latest trends show that large populations of Gen X or Baby Boomer homeowners may not be selling anytime soon.”
If retiring today, not-yet-retired Gen X and Baby Boomer homeowners said that, considering market conditions, they would:
The current housing market shows that sellers don’t want to give up their low mortgage rates to purchase new properties. Bank of America Securities notes that about 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. In fact, the Bank of America Institute found that median rent payments increased by 8.1% YoY in September.
While many Gen X and Baby Boomer homeowners may have no plans to sell their homes soon, they’re actively helping the next generation take steps toward homeownership. Those who plan to support the next generation’s homeownership goals will:
Gen X and Baby Boomer homeowners are also planning to use home equity to achieve personal goals. 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%).
The study was conducted October 19 - October 23, 2022, by Ipsos and is based on nationally representative probability sample of 1,554 general population adult (age 45-76) homeowners. This survey was conducted using the Ipsos KnowledgePanel®, the largest and most well-established online probability-based panel that is representative of the adult US population. Panelists are scientifically recruited into this invitation-only panel via postal mailings to a random selection of residential addresses. To ensure that non-internet households are included, Ipsos provides access to a tablet and internet connection to those who need them. Because of this probability-based sampling approach, KnowledgePanel findings can be reported with a margin of sampling error and projected to the general population. The margin of sampling error for the general population sample is +/- 2.6 percentage points at the 95 percent confidence level.
Additionally, Sparks Research conducted a national online survey on behalf of Bank of America between February 18 and March 8, 2022. Sparks surveyed a national sample of 2,000 adults ages 18+ who currently own a home or plan to in the future. The margin of error for the national quota is +/- 2.2 percent at the 95 percent confidence level. Select questions allowed respondents to choose more than one answer, resulting in responses that may equate to more than 100 percent.
Bank of America is one of the world’s leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 68 million consumer and small business clients with approximately 3,900 retail financial centers, approximately 16,000 ATMs and award-winning digital banking with approximately 56 million verified digital users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business households through a suite of innovative, easy-to-use online products and services. The company serves clients through operations across the United States, its territories and approximately 35 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.
For more Bank of America news, including dividend announcements and other important information, register for news email alerts.
Susan Atran, Bank of America
To download files for editorial use, click on the video image and select 'Save'.