Commercial PropertyNAR"s New Study Shows How Boomers Will Impact Housing
Society is rapidly changing. For the first time ever, married households are outnumbered by non-family, nontraditional households including a burgeoning number of single heads of households. Already single women are 20 percent of homebuyers, which raises the question how the nation"s largest generation to date -- the Baby Boomers born between 1946 and 1964 -- will impact housing as they hurtle toward retirement.
Not only do boomers make up 37.5 percent of U.S. households, they also make 31 percent more money than the median for all households -- $64,700 in 2005.
Baby boomers will impact popular culture for at least the next 12 years until the GenX"ers take over as the largest population group, but until then, the real estate industry is still struggling with second guessing what kind of impact these 78 million people will have on housing.
According to a new study of about 2000 baby boomers performed by Harris Interactive for the National Association of Realtors, (NAR) the "me" generation will have a wide variety of needs, largely dependent upon their retirement plans -- or lack thereof.
David Lereah, chief economist for the NAR, says baby boomers are living longer and are considering more options when it comes to retirement, which will significantly impact housing over the next 10 to 20 years.
"A significant portion of baby boomers married later in life and had children at a later age, which means many will continue to work beyond the traditional retirement age," says Lereah. "Older boomers are thinking about retirement, but one-third expect to go back and forth between periods of work and periods of leisure, and another 35 percent want to work at least part-time or start a business -- all of this will have an impact on the kind of homes they buy as well as where they buy them."
The median age at which baby boomers expect to stop working is 70, but over one-fourth (27 percent) say they never intend to stop working.
With most baby boomers currently in the workforce, and with many still raising children, baby boomers remain a significant driver of the housing market, as families with children compose nearly half of homebuyers.
"Just over a quarter of the boomer generation is aged 55 to 60, which is when many people traditionally begin to focus on their retirement plans, but analysis of the survey suggests they are more likely to stay in the workforce longer and will be less likely to downsize than previous generations," says Lereah, "The leading edge of the boomer generation is the key to future housing impact."
Because many boomers are putting off retirement, that could change the focus on retirement destinations, although 42 percent of respondents favor the South, 32 percent favor the West, 15 percent the Midwest and 12 percent the Northeast.