June 18, 2024

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Boomers are setting up a showdown with Millennials, who are getting older and spending hundreds of thousands on renovating those homes

Boomers are setting up a showdown with Millennials, who are getting older and spending hundreds of thousands on renovating those homes

The housing world is a bit of a generational war zone, mostly between baby boomers and millennials.

Baby boomers make up more than a third of homeowners, and more than half don't even have a mortgage, Eric Finnegan, vice president of demographics at John Burns, a research and consulting firm, previously said. luck. So in our current environment, where… Mortgage rates Soaring from historic lows throughout the pandemic to their highest level in more than two decades in October of last year, being mortgage-free is like hitting the mother connection. That's partly because baby boomers aren't moving — why wouldn't they give up their mortgage rate, or a much lower rate, for one in the 7% range plus a higher monthly payment?

On the other hand, some Millennials, who have not bought their first home, are looking at a much different housing market than before the start of the pandemic — a market where the salary needed to buy a new home has nearly doubled, the cost of homeownership is the highest it has ever been, and… Low inventory levels are much more dangerous.

Baby boomers live in particularly large homes, which are needed by millennials who are starting their families. An analysis by Redfin earlier this year found that empty-nesters own 28% of the country's largest homes, those with three or more bedrooms; Only 14% of millennials with children have their own. As previously mentioned, there is simply no financial incentive for the former group to give up their homes. But it wasn't always this way. “The landscape has changed over the past decade: 10 years ago, young families were as likely to own large homes as empty-nesters,” the analysis said.

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Last year, existing home sales fell to their lowest level in nearly three decades; No one was buying or selling their home. Aside from having no financial incentive to sell, baby boomers are aging because they can. In doing so, they are redesigning and improving their existing homes — not just for safety but for comfortable and luxurious living, as Finnegan previously explained.

For some baby boomers, the idea of ​​renovating their family home — albeit potentially too big to fit their empty nest — is more appealing than moving. More than half of them have no plans to move, even though the majority have lived in their current homes for more than a decade, according to a recent report. a report By home improvement company Leaf Home and Morning Consult released in January.

Some baby boomers have spent tens of thousands of dollars—and in some cases hundreds of thousands of dollars—renovating their homes to make their homes more updated, comfortable, and safe for old age. A California couple in their 70s, Brenda Edwards and her husband, spent more than $100,000 renovating their house to accommodate a wheelchair in case they needed one.

“We felt comfortable,” Edwards told The Associated Press about why they wanted to stay rather than move. “We have a pool. We have a spa. We put a lot of love and effort into this yard. We want to stay.” Plus, “it would be very difficult to buy anything else” since their house is almost completely paid off, she said.

Many boomer homeowners are “choosing to upgrade their existing homes for the long term,” says Marin Sarkeesian, chief economist at home renovation and design website Houzz. luck, Instead of dealing with rising mortgage rates. So much so that baby boomers are driving renovation activity across all generations, according to the site 2024 Who's Who and Home Study Released in March.

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“We're seeing a growing trend toward universal design elements in kitchens and bathrooms specifically, as homeowners prepare their homes to age in place,” says Sargsyan. “Changes include wheelchair-accessible paths, additional lighting, pull-out cabinets, round countertops, non-slip flooring, and grab bars.”

Leaf Home also reports high demand for walk-in showers and bathtubs as well as stair lifts, making homes more accessible for aging generations. “We expect to see an increase in baby boomers’ desire to make improvements to their homes to keep them comfortable and safe,” says Nina George, chief growth officer at Leaf Home. luck.

But some baby boomers are selling and some millennials are buying homes. Millennials have surpassed baby boomers as the largest generation of homebuyers, according to the National Association of Realtors.

“The generational tug of war between Millennials and Baby Boomers has continued this year, with Millennials rebounding to capture the largest share of homebuyers,” said Jessica Lautz, deputy chief economist and vice president of research at NAR, alongside the latest generational trends report. “.

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