Lock-In Baby Boomers Being Blamed for Housing Inventory Shortages Have Few Options: Experts

A lack of housing inventory, high home prices, and high mortgage rates continue to deter those wanting to buy homes in 2024. At the top of the logjam is the baby-boomer generation (born between 1946 and 1964), which is being targeted as possibly exacerbating the inventory shortage because they just won’t move.
According to real estate referral company Clever, while 61 percent of the baby boomers they surveyed currently own homes, more than half of them (54 percent) have no plans to sell, along with the expectation they’ll spend the rest of their lives in their current homes.
Clever data writer Nick Pasano told The Epoch Times that he is aware of bitterness toward the lock-in baby boomers by younger homebuyers struggling to find available homes in today’s market.
“I’m a millennial, and I get the sense they feel resentful of boomers and the stories about those who might have at one time bought a home for $5,000 and sat on it, and now it’s worth a million,” he said. “It’s definitely a lot less affordable for younger people to buy homes today, but I also think they forgot how low salaries used to be for boomers.”
“Where are they going to go? In this marketplace, unless you’re planning on moving to a retirement community, it’s really hard to downsize,” Keith Gumbinger, vice president of HSH.com mortgage, told The Epoch Times.
“They might be in a home that’s now worth $700,000, for instance, and if they downsized, they would be giving up everything they have for a little less-expensive house. They aren’t going to Florida because prices are off the charts there. There are no more inexpensive markets to move to. There’s more of an emphasis now on aging in place.”
According to Fanny Mae, baby boomers inhabit 32 million owner-occupied homes, accounting for two out of five homeowners in the United States. The report also noted that the age group was declining to move even before mortgage interest rates and home prices soared.
“Retention rate trends for older adults have been steady regardless of the economic and housing market climate, thus providing a solid analytical footing for projecting future exits of older homeowners,” the report stated.
However, as baby boomers continue to age, the report claims the lock-in effect will loosen.
“I think it’s hard to say how much they’re affecting the market. The bigger issue is we aren’t building anymore. I don’t blame boomers as a factor in where prices are now. It’s misplaced blame on a group that has decided to stay in their homes. Where are they going to go? We found only one in 12 will eventually move in with their children or go to a retirement community or assisted living.”
A Redfin survey of older Americans in the spring also pointed to the baby-boomer lock-in effect, reporting that over three-quarters said they would be staying in their current home as they age, with 27 percent having paid off their house or were nearing the conclusion of their mortgage obligations. Another 21 percent blamed high home prices as the reason they’re not moving.
There may be other factors in play, according to Bumbinger, who says the unwillingness to move may also result from a fear of a repeat of the Great Recession.
“When you think about it, you look at what they’ve gone through in their lifetimes from booms to busts and multiple swings in interest rates,” he said. “If you look at the reason people might be staying in their homes, with the lock-in effect and all, the genesis of this may have also come out of the last housing market crash where we had underwater homes.”
But he added that while baby boomers dominate the housing market today, another generation is poised to grab an even bigger percentage of home ownership in the future.
“Millennials will be greater in size, and they will be the ones imposing on those coming up behind them.”