This week Freddie Mac released a survey showing nearly 40% of those born before 1961 would prefer to move at least one more time. Of those, 70% said they are likely to purchase their next home, with half looking to downsize. This creates new opportunities and challenges for the industry in the coming years, and with the size of this generation, the industry will need to adjust.
“The decisions the nation’s Baby Boomers and other older homeowners make will have an enormous impact on the demand for housing and new mortgage credit for the foreseeable future,” said Dave Lowman, executive vice president of Single-Family Business at Freddie Mac. He continues, “The size of this generation and the fact that they hold close to two-thirds, approximately $8 trillion, of the nation’s home equity makes it very important that we watch what they do.”
With the ideal home being similar for both baby boomers and millennials, these two generations may be fighting for the best inventory over the coming years. Both groups are looking for cost and convenience when determining if and where their next move will be. With the continued low inventory, first-time homebuyers will be the ones to struggle. This could force a large portion of millennials to stay put for a while or to compromise on what they are looking for.