New Study Reveals One Surprising Reason for the Inventory Shortage

There has been a great amount written on millennials and theirimpact on the housing market. However, the headlines oftencontradict each other. Some claim this generation is becoming thelargest share of first-time home buyers, while others claimmillennials don’t want to own a home, blaming them for thedip in homeownership rate.

While it is true that millennials have achieved milestones likegetting married, having kids, and buying homes later in life thantheir parents and grandparents did, they are not solely to blamefor today’s housing market trends.

Freddie Mac’s Insight Report explored theimpact of the Silent and Baby Boomer Generations on the housingmarket.

If millennials are unable to find a home to buy at a young agelike their predecessors, then who is living in those homes?

The answer: Seniors born after 1931 arestaying in their homes longer than previous generations, insteadchoosing to “age in place.”

Freddie Mac found that,

“this trend accounts for about 1.6million houses held back from the market through2018, representing about one year’s typical supply of newconstruction, or more than half of the current shortfall of 2.5million housing units estimated in December’sInsight.

Older Americans prefer to age in place because they aresatisfied with their communities, their homes, and their quality oflife.”

According to the National Association ofRealtors, inventory of homes for sale is currently at a3.5-month supply, which means that nationally we are in aseller’s market. A ‘normal’ housing marketrequires 6-7 months inventory, a level we have not achieved sinceAugust 2012.

“The most important fundamental in today’shousing market is the lack of houses for sale. This shortage hasbeen identified as an important barrier to young adults buyingtheir first homes.”

Bottom Line

If you are one of the many seniors who desires to retire in thesame area you’ve always lived, you’re not alone. Willyour current house fit your needs throughout retirement? If youhave any questions about demand for your house, let’s gettogether to discuss the opportunities available today!