Be Nice To Your Elders

Of course you should be nice to your elders, but when it comes to housing, one needs to be extra nice.  In housing we have some challenges.  We have an inventory problem and we have an affordability problem.  Many of your elders don’t have those problems so kids, homebuyers need to be extra nice to this group of people, not only because it’s the right thing to do but because they might be the key to solving our housing challenges.

Here are some statistics from this year.  The average age of a home seller in the past year was 63….63! This is the oldest it’s ever been. The median age of a home buyer was 56, which is also the highest it’s ever been.  The percentage of first-time homebuyers was 24% where normally it’s about 33%. The average age of the first-time homebuyer was 38, again the highest it’s ever been. Almost 80% of all homes sold nationally were from sellers who had no kids in the house, in 73% of all homes purchased the buyers did NOT have any kids under 18 living at home.  Housing is out of reach for many homebuyers because of lack of inventory and affordability, so are we destined to become a renter nation?  Corporate home buyers, higher interest rates, lack of building and lack of inventory are crowding out wanna be buyers.

The good news is that we are seeing signs of the market starting to loosen a bit and a lot has to do with our elders.  First, there are more elders. The baby boomers are starting to downsize and many, if not all, have a ton of equity in their homes and have wealth to pass down.  There is a “silver tsunami” coming, and in the next 20 years, trillions of dollars of wealth will be transferred to younger kids and relatives, be it by helping with down payments, paying cash or participating in paying and living via multigenerational housing.

Multigenerational housing will be built or converted so mom and dad can help pay but, by staying in the home, they can help with grandkids thus lessening daycare costs and allowing both parents to work. Builders are stepping up and building more homes as politics are becoming clearer after the election. Although interest rates will never get back down to the 3-4% range, they are trending down compared to the last few years giving homebuyers a little more comfort. Inventory is starting to pick up locally, up almost 25% from the last few years, which I see continuing for the next couple of years.

Again, be nice to your elders, they have the houses you need to buy, they have the wealth you need to help you buy them and last, you can learn from them by noticing how they used homeownership to gain generational wealth they can pass down to their kids!