Aging boomers “will swell the number of dwellings released into the housing market over the next four decades": Report
Opportunity is knocking for so-called echo boomers to purchase the homes of their aging parents. But with the lasting impact of the recession, can they afford to answer?
A new Bipartisan Policy Center report notes that the housing market recovery over the next two decades will depend on echo boomers, but these children of boomers born roughly between 1981 and 1995 have been hard hit by the recession.
America’s seniors are in better health and living longer. The population of Americans over age 65 has increased by about five million between 2000 and 2010. The Census Bureau forecasts that over the next 20 years, the senior population is expected to grow by 30 million. As a result, senior population is expected to grow from 13 percent to about 20 percent of the national population by 2030.
While these seniors will need housing, they also contribute to a growing share of the housing supply, the BPC report notes. As they enter their 60s, boomers release more housing units into the supply than they absorb. Aging boomers “will swell the number of dwellings released into the housing market over the next four decades,” the report states. The increase “is likely to be felt most acutely in the housing markets of the Northeast and Midwest, where the number of older homeowners seeking to sell their homes already accounts for a large share of the houses bought by younger homebuyers.”
But echo boomers are entering independent adulthood with reduced income and employment, limiting their ability to form households and buy homes. The report notes that they will account for between 75 percent and 80 percent of the owner-occupied housing absorbed by people under 65 before 2020. A prolonged economic downturn and weak or uncertain job market “would substantially depress household formation and homeownership by the important segment of the population.
The report projects a continued increase in rental housing demand as adults ages 35 and older have either shifted to renting from owning homes or delay homeownership.
Particularly hard hit have been black and Hispanics. Black homeownership was 28 percentage points below white homeownership in 2010. Hispanic homeownership lags white non-Hispanics by 25 percentage points.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.