Although not solely responsible for the shortage of houses for sale, Baby Boomers are being depicted as contributing to the inventory issue since many are remaining in their homes longer than expected.

For example, a Yahoo Finance article describes a “showdown” between Boomers and Millennials, highlighting that Boomers are opting to renovate their homes and age in place.

But it is understandable, given that over half of them are mortgage-free, and those who still have mortgages likely enjoy lower rates than current ones. Moreover, there aren't many homes available for them to purchase.

The article notes that Boomers constitute over a third of homeowners, with more than half having no plans to relocate. Instead, many are investing tens to hundreds of thousands of dollars in renovations to enhance safety and comfort as they age.

If your home is paid off (or affordable), comfortable, and manageable without financial strain or depleting savings, you have every right to stay! It is not your duty to resolve the housing crisis due to limited homes for sale.

However, consider selling if staying in your home is financially burdensome…

Aging in Place Isn’t Ideal for Every Boomer

Unfortunately, remaining in their current homes may not be the best choice for every Baby Boomer. According to another Yahoo Finance article, many are “house poor,” struggling to afford their home expenses, let alone other costs.

In such cases, unexpected expenses can make it hard to cover mortgage, taxes, utility bills, or maintenance, not to mention improvements for better livability with age.

The article identifies four main reasons Boomers become “house poor,” including:

• Choosing not to downsize. Selling and moving to a smaller home might not appeal if you love your current house or want to avoid stress. However, a smaller home could significantly cut costs, possibly allowing a purchase without a mortgage or avoiding rent.

• Refinancing their mortgage and taking cash out. Many refinanced for lower rates or to access home equity, extending monthly payments, which can be problematic without steady income. Before refinancing for cash, consider if you can maintain payments long-term.

• Not using their house as an income-producing property. Renting out part of your home could help financially, but it's not for everyone. If comfortable with a tenant, it might work, but ensure thorough vetting first, as eviction can be difficult.

• Dipping into savings to keep home. Savings are meant for living comfortably post-income, so using them to afford your home is fine unless it is depleting them too quickly. Selling before exhausting savings is wiser.

If any of these situations apply to you, consider selling your home soon. It could prevent further financial strain and capitalize on a strong real estate market, with home values still at record highs in many areas.

If you're already feeling financial pressure or worry about future issues, you might consider:

• Consulting a local real estate agent to determine your home's current market value.

• Listing alternative living options. Consider buying smaller, renting, living with family, or moving to a retirement community or assisted living. Evaluate all options and costs for a long-term plan.

• Involving loved ones in the decision. Moving is challenging, so seek support from family and friends.

Bottom Line

Many Baby Boomers intend to renovate and age in place rather than downsizing. Unfortunately, not everyone can afford this, leading many to become “house poor.” Boomers facing financial strain, or fearing future issues, should consider selling while the market favors sellers.

If you are deciding whether to age in place or sell, let's connect. We can help you explore your options and provide assistance either way!

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