Will Aging Baby Boomers Downsize from Single-Family Homes?
Baby Boomers, as a focus of study for their effect on the housing market, have been an underserved population, according to a blog post written by Trulia's Jed Kolko. He investigated whether baby boomer downsizing—selling a single-family home in order to move into a multi-family unit—could be a future trend in the housing market.
He believes that this shift away from single-family homes is unlikely for two reasons: baby boomers are still years away from the age of downsizing, and long-term trends reveal that older households are less likely to downsize than older adults in previous years.
He cites a study, 2013 Current Population Survey's Annual Social and Economic Supplement (CPS ASEC), from the University of Minnesota on baby boomers—the section of the population born between 1946 and 1964. He concludes that baby boomers are less likely than "almost any other age group to live in multi-unit buildings as opposed to single-family homes."
The study reveals that the only age group less likely to live in multi-unit buildings is 70-74 year-olds, an age group baby boomers are just starting to enter.
Kolko writes, "Just 25% of households headed by 80-84 year-olds live in multi-unit buildings—which is a lower share than 40-44 year-olds. Even among households headed by adults aged 85 and older, only one-third live in multi-unit buildings—and that's only counting those who head their own household are not living with adult children or in institutions."
As baby boomers age, they will enter into the 70-74 year old age group—a population with a lower likelihood of living in multi-unit buildings. However, as baby boomers enter into the 75-79 year old age group, their likelihood of living in multi-unit buildings begins to rise, even more so as baby boomers reach 80 years-old and higher.
Kolko is cautious, however, to project past trends on future behavior. Will baby boomers, ten years from now, make similar decisions of aging people in the past? To answer this question, Kolko examined data back to 1979.
"The share of households headed by 50-69 year-olds—roughly the age of baby boomers today—living in multi-unit buildings rose to 21.3% in 2012 and 21.6% in 2013, after holding steady in the 19-21% range for decades," Kolko writes.
He concludes that baby boomers today are slightly more likely than their parents to live in multi-unit family buildings instead of single-family homes.
Overall, the total population of 70-plus households in multi-unit buildings has been declining for decades. Kolko notes that in 1980, 30 percent of the population lived in multi-unit buildings, dropping to under 25 percent in recent years. "That means that even if the recent uptick in multi-unit living among 50-69 year-olds persists, baby boomers are entering an age group that is less likely to live in multi-unit buildings than their own parents did two or three decades earlier," Kolko concluded.
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