Fannie Mae study shows limited supply relief for buyers as seniors age in place
Homebuyers hoping for a wave of homes on the market as older Americans downsize may need to readjust their expectations.
A new Fannie Mae study revealed that most homeowners aged 60-plus plan to stay in their current homes indefinitely, potentially limiting the supply of homes for sale and impacting the overall housing market.
The study found that 56% of older homeowners have no intention of selling, with only 17% having already sold or planning a future sale. Homeowners cited love of their homes, a sense of accomplishment from being debt-free, and community connections as reasons to stay put.
Read more: US home sales – what’s the latest?
This trend could prove frustrating for homebuyers seeking more choices in a tight market. Since older homeowners make up a substantial portion of the homeowner population, their decision to age in place limits the number of houses coming on the market, potentially further fueling competition and price increases.
“We believe older homeowners exiting their homes are unlikely to offer much near-term housing supply relief,” Fannie Mae said in the report.
Most older homeowners are also reluctant to tap home equity as a retirement income source, with just 15% interested in options like reverse mortgages. While older homeowners tend to be debt-averse, there is some interest in services that support aging in place. Home improvement loans (26%) and affordable home maintenance/repair services (48%) saw the most interest among respondents.
“If household formation and ownership rates remain unchanged from 2022 levels, the change in population levels alone would mean the 60-plus population could approach nearly half of all homeowners in the next decade,” Fannie Mae chief economist Doug Duncan wrote in a blog post.
Stay updated with the freshest mortgage news. Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.
