Maria Elena and Dave Byron bought their four-bedroom, three-bath house in Hayward, Calif., in 1973. Forty-six years later, the Byrons, now empty-nesters, have made the home improvements so they can age in place.
They are two of a growing number of seniors who are choosing to stay in their homes rather than downsize or move to warmer climates. But such choices are shrinking the housing supply for first-time buyers and young families looking for more space.
When more homeowners hold on to their property, they help drive up prices on the housing market, which hurts sales. When people move less, communities can also fall behind economically.
“It can be a bad thing,” said Ryan Sweet, director of real-time economics at Moody’s Analytics. “We have seen that population growth is key for economic activity, so if the boomers move less, some communities will not see the same growth.”
Maria Elena, 76, said she and her husband, 80, thought about downsizing and expected to sell their two-story house for a good amount of money. But even if they bought a smaller house, they would end up spending almost as much.
“I just didn’t think it would be worth selling our house and then having to pay the same amount,” she said. “Our house is paid off, and we will soon be on a limited budget with only Social Security and retirement money.”
She said they live in a strong community and moving to another state isn’t an option, as she wants to be close to friends and family.
“Some of our neighbors have been in the area for decades and become our friends,” she said. “We love this house. It is a good location and the neighborhood is stable, and people in our church community live near us.”
The housing market itself is helping keep seniors in place. One of the big issues for senior sellers is that millennials – whom the U.S. Census Bureau estimates soon will overtake baby boomers as the nation’s largest living adult generation – wouldn’t want to buy them. The main issue for millennials is affordability, and a lot of younger buyers prefer urban housing over the suburban homes preferred by the boomers.
“Millennials prefer new housing developments, so buying into old neighborhoods isn’t something they would want to do,” said Michael Englund, chief economist at Action Economics, LLC. “They don’t like the fixer-upper.”
Carrying mortgage debt may offer another explanation as to why many seniors prefer to remain in their current homes.
“We haven’t seen the total impact from the recession wear off,” said Dr. William Frey, a demographer and sociologist specializing in U.S. demographics. “It has impacted older people who may want to sell their homes but may not be able to do so.”
There has been less activity on the housing market since the 2008 financial collapse. Before the recession, many saw housing as a safe investment.
“People, including baby boomers, tried to own the most expensive house they could afford,” Englund said. ”Today, millennials have reduced that notion as they are renting apartments, getting married later and have delayed buying their first homes.”
Geographic mobility, the Census Bureau’s term for the movement of people within the United States, has declined steadily over the last three decades. In 1984 and 1985, 20.2%, or one out of every five Americans over a year old, moved. In 2017 and 2018, the rate was only 10.1%, according to the Census Bureau.
“Earlier, a lot of the movement had to do with people moving to other places for work,” said Greg Kaplan, professor of economics at the University of Chicago, who has studied interstate migration from 1991 to 2011. “But today, job opportunities are more evenly distributed around the country.”
Another possible explanation is the rise of technology and digital culture over the last three decades. Before, people usually moved to a new city and then searched for jobs, Kaplan said. Today, when travel is cheaper and most job postings are online, people can do long-distance job searches, and move only once they find a job.
“In the ‘70s, ‘80s and ‘90s, people would move around more, and some of the moves were experimental,” Kaplan said. “Today, you can go online and read about a place and read reviews and get references, so people have more information. There’s been a decline in serial movers.”
Many retirees venture off to warmer states, like Florida and Arizona, for year-round sunshine, lower taxes and relatively low costs of living. But most tend to remain in the state, county or local area where they had previously settled. The reasons senior citizens move less than younger people are many: some cannot afford it, some wants to be close to family and friends, and some simply want to stay in their homes.
Robert and Kathy Raimonde, both retired, live in a two-bedroom condominium in Garden City, Long Island. Every winter, they spend a couple of months in a rental apartment in Fort Lauderdale, Fla.
“We cannot handle the winter here, as we like to be outdoors,” Robert said. “But we enjoy three seasons up north, and the summers in Florida are too hot, so we don’t have any plans on moving there full time.”
They are not planning to downsize, either.
“We’re in a position where we can afford to have more space than one bedroom,” Robert said. “We can have our daughter or friends visit, and there’s more space to store things. We’re downsized as much we want to be right now.”