More aging parents are staying put rather than selling their homes as the amount of “empty nester” households has risen to record highs, according to Zillow.
The number of empty-nest households, or homeowners aged 55-plus who have no kids at home, stood at 18.3 million in 2015, comprising 15.5 percent of all households, according to a new market report by Zillow. In 2005, there were 13.2 million empty nester households making up 12 percent of all households. Atlanta has 14 percent of its households owned by empty nesters.
Coastal cities and major markets are largely immune from the problem, though their number of empty nesters has gone up, the study said. The issue, however, is largely a problem in the Great Lakes and Rustbelt regions of the country, where weak job markets and the effects of the housing crash are keeping older parents in place.
“Low densities of empty nests are found in booming cities with strong job markets, new family-oriented areas and retirement communities,” the report reads.
Reasons for increase
Housing prices are one reason why empty nesters are staying put. In fact, the number of empty nesters still paying their mortgage has also reached record highs, with 44 percent of empty nester households having a mortgage in 2015. That’s a seven percent increase from 2005. Of Atlanta’s empty nester households, 57 percent still have mortgages, one of the highest rates among major markets.
With housing prices rising throughout the country, older Americans might not feel they have enough money to afford a new place, especially if they have an outstanding mortgage.
“Markets with less affordable housing generally have higher shares of empty nesters with outstanding mortgages,” reads the report.
The other major factor that keeps empty nesters in their homes is the local job market. A robust local job market generally increases the demand on home prices, making it more attractive to list, according to Zillow.
Another reason that job market strength is a factor is because better employment opportunities means the parents’ children are more likely to move out. As we know, Millennials are staying at home longer than any other generation before them.
In fact, the amount of “near-empty nests,” meaning households that will be empty nests once an adult child moves out, is also rising. There are 4.3 million near-empty nesters, a jump from 2.7 million in 2005, according to Zillow.
“Communities that rank high for near-empty nests tend to be less affordable or have weak labor markets, places where young adult are likely to live with their parents for longer,” the report reads.
Of course, there is no guarantee that those parents will sell once the last adult child moves out. More and more Americans are choosing to “age in place” rather than downsize or move to retirement communities.