Seniors Staying Put

March 12, 2019
senior-couple-in-house
The scarcity of housing created by seniors continuing to own makes renting more attractive to younger generations.

 

Seniors who were born after 1931 are less likely to sell their homes than were previous generations—and it’s a significant cause of the housing shortage, according to the “February Insight” report from Freddie Mac. The result is around 1.6 million houses were not for sale through 2018, representing about one year’s supply of new construction, or more than 50 percent of the shortfall of 2.5 million housing units—that the market faces. The scarcity factor serves to increase housing prices and make renting more attractive to younger generations. However, a shortfall of new construction increases house prices and rental rates. “We believe the additional demand for homeownership from seniors aging in place will increase the relative price of owning versus renting,” said Sam Khater, chief economist at Freddie Mac. “This further highlights the importance of addressing barriers to the production of new housing supply to help accommodate long-term housing demand.” Improved health and higher levels of education are causes of the trend. And it’s likely to increase over time as improvements in health care and technology make aging in place easier. For example, the capability to Skype with a doctor. 

Source: The Mortgage Leader