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Young move-up home buyers are growing increasingly worried that baby boomers, many of whom are staying put in their current home, won’t update their properties and will pass down costly renovations and repairs to the next generation of owners, according to a new studypdf from Morning Consult and Leaf Home, a national home improvement company.
Many baby boomers are choosing not to downsize, with 68% saying they’ve lived in their homes for 30 years or more, the study shows. Many in that group admit they’ve never done renovations or replaced major appliances—and they don’t have any plans to, either.
Researchers say this could become a nightmare scenario for millennials, who may inherit or purchase these “time capsule” homes. Younger buyers’ budgets already are stretched thin by high home prices and mortgage rates. It’s difficult for many to add pricey renovations to their homebuying budget.
“The housing market is caught in a generational tug-of-war,” says Leaf Home CEO Jon Bostock. “Boomers will soon face aging-in-place hurdles, while millennials will face the surprise of homes in need of major updates. With an aging and ignored inventory of homes available in the next decade, we may see a crisis that will overwhelm the home improvement industry and strain the budgets of inheriting millennials, impacting the housing market.”
Taking More Than Their Fair Share?
Empty-nesters own twice as many large homes as millennials with children, 28% versus 14%, respectively, according to a new study from Redfin. But many young families need extra space: Millennials with children comprise about a quarter of three-bedroom-plus rentals in the U.S.—the largest share compared to any other generation.
Some millennials are waiting out the housing market for more larger homes that can accommodate their growing families. Ten percent of millennials say baby boomers are staying in their homes too long and should free up housing for them, the Morning Consult and Leaf Home survey finds.
But baby boomers, like many other homeowners, have little incentive to sell. Some may not want to give up the ultra-low mortgage rate they got in recent years while others own their home outright and are sitting on record amounts of equity.
Housing Experts: Crisis Looming
The aging housing stock in America is an issue that experts have been flagging for years. Economists are concerned about the impact aging homes could have on a housing market already struggling with a historic inventory shortage.
The median age of an owner-occupied house is 40 years old, according to the American Community Survey. Slightly less than half of the owner-occupied homes were built prior to 1980; about 35% were built prior to 1970. As homes age, their components need to be replaced or repaired to keep them sellable. `A bloated, aging inventory of neglected homes could be the next big headache for the housing market, researchers warn.