Majority of older homeowners plan to age in place

A majority of the nation’s older homeowners plan to age in place and leave their home, or the money from a sale of their home, to their family, a new Freddie Mac survey finds.

Among adults aged 55 years and older, 70% of respondents said they’d pass along their home or the wealth generated from it to their children or family members. The age range includes baby boomers and the oldest Generation Xers, born between 1965 and 1980.

Of 2,249 Freddie Mac respondents, 66% said they plan to age in place, a share up 3% from 2016. Only 27% of homeowners 55 years and older said they feel confident they’d move again, while 36% said they wouldn’t move. The remaining 37% were unsure of their plans, but Freddie said the numbers suggest older Americans aren’t ready to leave.

That’s for younger homebuyers who have shown an appetite to purchase but face a difficult market beset by high rates, rising prices and few homes to buy.

The responses are similar to a recent report finding prospective buyers increasingly stopping active searches for a new home. Activity among potential buyers declined over a 12-month period for Gen Xers, from 51% to 45%, and for baby boomers, from 43% to 39%, according to a first quarter Housing Trends Report from the National Association of Home Builders.

Aging homeowners feel more financially secure than they did five years ago, according to Freddie Mac. The percentage of homeowners who said they were very confident they will have a financially comfortable retirement rose from 27% in 2016 to 39% in 2021, the survey said. 

In contrast, older renters were less secure in their future, with 24% believing they won’t be able to leave anything to their family compared to just 3% of property owners. Rents nationwide have skyrocketed in the past year and have made buying in some markets cheaper than leasing.

America’s aging homeowners have benefited from the market’s price gains as their equity has risen significantly. Homeowners 62 and older had a record $10.6 trillion in home equity at the end of 2021, according to the National Reverse Mortgage Lenders Association/RiskSpan Reverse Mortgage Market Index. Some lenders in response have introduced reverse mortgage products, in some cases lowering the age of eligibility to 55 years old.