Is A ‘Generational Housing Bubble’ Taking Shape?
The baby boom has long been a significant part of the housing market, so how will the market be affected by the aging of this great generation? We are moving towards “generation the residential balloon? ” Fannie Mae An economic and strategic research group joined forces with the University of Southern California to address this issue in a new housing research report entitled ” “The arrival of old homeowners”.
Currently, baby boomers, born between 1946 and 1964, live in 46 million owner-occupied homes with a total combined value of 13.5 trillion. dollar, according to the survey.
“With the oldest boom in the early 1970s, mass housing displacement began, fueling the fears of a” general housing bubble, “in which demand for housing by the younger generations is insufficient to fill the gap left by many leaving older owners, “said Dowell Myers of the University of Southern California and Patrick Simons of Fannie Mae in his report, published by Fannie Mae blog,
Examining the historical and recent property trends among older Americans, the researchers sought to predict how older the owners would leave the market in the next two decades.
Between 2006 and 2016, 9.2 million Americans who turned 65 or older in the decade have been transferred from ownership, the report said. Over the next 10 years, from 2016 to 2026, researchers expect another 10.5 million to 11.9 million owners to leave their homes. Over the next decade, between 13.1 million and 14.6 million older Americans will leave the housing market.
“The number of older homeowners at risk of wear and tear due to old age will become hot as the big generation of baby boomers is in full force in the 65-year age group where owner retention rates drop significantly “explains Myers and Simmons.
Researchers have identified some possible ways to “mitigate the market impact of the forthcoming wave of older homeowners’ departures,” such as offering funding for home improvement and social services for those who want to age in their homes, instead of moving.
Another way to ease the impact is to help the thousands-year-old to replace some of the boomers when they leave the market by providing “sustainable” funding opportunities for buyers for the first time.
The report states that “immigration policy is also likely to play a role in determining the adequacy of demand-side substitution for boom-free homes” because “immigrants contribute significantly to housing demand.”
“Encouraging smooth home equity generation is likely to require age-oriented approaches that seek to form bonds of interest in the housing market between the old and the young,” said Myers and Simmons.