Home Buying and Selling
Many baby boomers are choosing not to downsize and update their aging homes, which could create major problems for younger generations looking to buy real estate. A new study from Morning Consult and Leaf Home found that 68% of baby boomers have lived in their current homes for 30 years or more, and many admit they’ve never renovated or replaced major appliances like water heaters, furnaces, or roofing.
This reluctance to update could be a nightmare scenario for millennials and Gen Z, who may eventually inherit or purchase these outdated “time capsule” homes from aging boomers. With high home prices and rising mortgage rates already stretching their budgets to the max, it’s extremely difficult for most younger buyers to budget for major renovations on top of their initial home purchase.
“The housing market is caught in a generational tug-of-war,” said Leaf Home CEO Jon Bostock. “Baby boomers will soon face aging-in-place hurdles as homes require accessibility upgrades, while millennials will face the surprise of buying homes that need tens of thousands in renovations and repairs.”
Some statistics paint a concerning picture:
Empty nesters currently own twice as many large, 3-4 bedroom homes as millennials with children (28% vs 14%), per Redfin. Many young families need extra space but can't find or afford it.
10% of millennials say baby boomers are staying too long in their existing homes and should free up housing stock for younger buyers, according to the Morning Consult/Leaf Home survey.
The median age of an owner-occupied home in the U.S. is around 40 years old, according to Census data. Slightly less than half of owner-occupied homes were built prior to 1980, with about 35% constructed before 1970.
As homes continue to age, their roofing, plumbing, electrical, HVAC and other systems need regular maintenance and replacement to keep properties updated and sellable. But many aging homeowners may not have the financial means or motivation to invest tens of thousands in renovations, especially if they don't plan to sell soon.
This growing glut of outdated housing inventory could become the next major crisis for the real estate market, experts warn. With inventory already at record lows, a bloated supply of aging, neglected homes could place further strain on availability and affordability.
Potential solutions exist, but require nuanced public policy changes. Governments could offer expanded tax credits or low-cost financing to help older homeowners update their properties before selling. Zoning reforms can also encourage construction of more diverse housing types catering to downsizing seniors.
But for now, younger generations may need to brace themselves for unexpected renovation costs when buying homes from aging baby boomers. Being prepared and budgeting extra will be key to avoiding financial pitfalls. Though challenges remain, generations working together to update and right-size housing can improve options for all.
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