Downsizing is a natural progression in housing we’ve come to expect of older generations, such as the aging Baby Boomers, whose preference for high square footage is diminishing as their children leave the nest and retirement sets in. But are we mistaken in our habitual assumption that older generations are leaving behind single-family homes for multifamily housing?
The Baby Boomer generation occupies over a quarter of the nation’s housing inventory, inhabiting 32 million detached single-family homes, according to Fannie Mae’s Housing Insights report. While the average number of rooms within these Boomer households has declined slightly in previous years, the number increased to seven across the entire generation between 2011 and 2013, according the U.S. Census Bureau’s 2014 American Community Survey.
Additionally, looking at both Boomers’ per-capita and per-household single-family occupancy rates, there is no statistical difference in 2013 from one and seven years prior, suggesting stable single-family home ownership.
The increase in number of rooms and the generation’s stable single-family occupancy through 2013 are two of three factors that suggest we live in an era where the prevalence of downsizing has decreased and the trend reserved for later in life.
A third factor indicative of a decrease in downsizing amongst older generations is apartment demand. The 2013 Current Population Survey’s Annual Social and Economic Supplement (CPS ASEC) found that Baby Boomers are not a major contributor to the growth in apartment demand, as the generation is the second least likely to live in multifamily buildings.
Rather than abandoning single-family homes and transitioning to apartment and condominium living as their own parents did in decades before, Boomers are remainng the heads of households. It’s not until ages 75-79 that multi-unit living begins to rise slightly from 20-23 percent amongst 50-74 year olds, and continues to increase to 35 percent amongst 85-plus year olds, according to the 2013 CPS ASEC.
So, who is downsizing? According to the Urban Land Institute’s Gen Y and Housing analysis, 50 percent, or half, of all Millennials rent. With the number of Millennial multifamily renters increasing by nearly half a million annually, according to Fannie Mae’s Housing Insights report, the driving force behind growing apartment demand appears to be the generation drowning in student debt: Millennials.
While Baby Boomers are breaking the mold as they continue to occupy single-family homes later in older adulthood, Fannie Mae suggests they may still move to smaller houses, but within the single-family home market.