Baby Boomers Staying Put

In the past, many empty-nesters downsized upon sending their children away for school and growing older. However, the Baby Boomers are defying this traditional pattern. With roughly 10,000 people reaching age 65 each day for the next 15 years, and 17% of the 76 million Boomers already in retirement, the decisions this generation makes are central to the housing market.  63% of Baby Boomers plan to stay in their current home once they retire, according to a survey of 4,000 Baby Boomer households conducted by the non-profit Demand Institute. Why? Many simply are not financially ready, with a substantial amount of equity tied up in their homes. The financial crisis caused the average Boomer household's net worth to drop from $200,000 in 2007 to $143,000 in 2013 according to Federal Reserve data. Additionally, the median outstanding mortgage balance for 50- to 69-year olds more than doubled from $48,743 in 1992 to $118,000 in 2013.

The financial situation is particularly tough for those also in the sandwich generation--middle aged people who find themselves supporting both aging parents and their children. This recent phenomenon can be explained by an increase in the average life expectancy in conjunction with an increased number of "adult children" living at home. A 2013 Pew Foundation survey of 2,511 U.S. adults revealed that at least 15 percent of middle-aged adults are financially supporting both their parents and children.

The Baby Boomers surveyed placed little weight on "aging-friendly" homes, with only 1/5 planning to live in a senior housing. This is despite the fact that roughly 75% reported serious health issues such as arthritis or high blood pressure.