A joint study by the 50+ Housing Council of the National
Association of Home Builders (NAHB) and the MetLife Mature Market
Institute shows the recession has made 55+ buyers more
practical when selecting a new home. Design considerations have
become less important, and financial concerns have become more
prominent.
Previous studies from these two organizations found that most
55+ buyers depended on home sale proceeds to finance a new
purchase. The most recent data shows that option diminished during
the economic downturn.
The study, “Housing Trends Update for the 55+ Market,” explores
recently released housing data from the Census Bureau’s 2009
American Housing Survey (AHS) on the 55+ demographic. The report
focuses especially on households living in active adult
communities, either age-qualified active adult communities where at
least one resident must be age 55+, other non-age-qualified 55+
owner-occupied communities (not explicitly restricted to 55+
households but nevertheless occupied primarily by people age 55+),
or age-restricted rental communities.
“By the year 2020, as Baby Boomers move into this age bracket,
almost 45 percent of all U.S. households will include someone at
least 55 years old,” said David Crowe, NAHB’s chief economist. “The
number of those households seeking housing better suited to their
changing needs will therefore rise dramatically.”
Crowe noted that about 54,000 housing starts are projected in
55+ communities this year, a 30 percent rise from estimated 2010
levels, but still relatively modest production. Starts in 55+
communities are projected to increase another 46 percent to roughly
79,000 housing units in 2012.
In 2009, only 55 percent of new age-qualified active adult home
buyers reported that their down payment came from a previous home
sale, significantly down from 100 percent of respondents in 2005
and 92 percent in 2007. In 2005 and 2007, no active adult community
buyers reported having to tap cash or savings for a down payment.
In 2009, 45 percent of the average buyer’s down payment came from
cash or savings.
Further analysis reveals other interesting developments. While
median prices for new 55+ homes remain lower than 2005’s peak, a
look at average home prices shows a big difference between buyers
in age-qualified active adult communities and other 55+ community
buyers. Average prices for 55+ homes dropped in 2007 and partially
rebounded in 2009. But prices for age-qualified communities more
than bounced back; they set a record with an average price of
$319,000. Buyers in that group were more affluent, with average
incomes of more than $80,000 a year. Twenty-seven percent reported
earning $100,000 or more compared to fewer than five percent of
such buyers in 2001.
“Most 55+ consumers – those who chose to move and those who stay
in their homes – report that they are happy with their homes and
communities,” said Dr. Sandra Timmermann, Ed.D., director of the
MetLife Mature Market Institute. “But those who did move to an
age-qualified community – about 3 percent – reported the greatest
satisfaction, rating their homes and communities at nine on a
one-to-ten scale.”
The desire to be near family and friends is the mature mover’s
overwhelming motivation, the report noted. The design, amenities
and appearance of the residence and the community remain important,
but less so than before the recession. 55+ buyers moving into
rental homes, both multi-family and single-family, cited a desire
for less expensive housing as second in importance to living near
friends and family.
Those who are able to buy are getting much more for less. In
2009, more than half of 55+ buyers said they were moving into
better homes, but fewer than half reported that their new homes
cost more than the old ones.
“Proximity to work” was more important than in the past for
those relocating to age-qualified, active adult communities – 12
percent in 2009 versus 2 percent in 2001 – underscoring the trend
toward delayed retirement in this age group. There was also a
reported increase in the share of 55+ single-family homeowners who
say they work at home – which may be a trend noteworthy to home
designers.
A small, but growing share of older households is taking
advantage of the ability to convert some of their home equity into
a reverse mortgage or home equity conversion mortgage. They tend to
be older, single-person households with lower household income and
longer housing tenure. Those with reverse or home equity conversion
mortgages represented more than 241,000 households in 2009, a 54
percent increase since 2007.
“Housing Trends Update for the 55+ Market” can be downloaded
from www.MatureMarketInstitute.com or from
www.nahb.org/55PlusResearch. It can also be ordered through Contact
Us on the MetLife Mature Market Institute Web site, or by writing
to: MetLife Mature Market Institute, 57 Greens Farms Road,
Westport, CT, 06880.
Methodology
The report was drawn from data in the 2009 American Housing
Survey (AHS), the most recent release of this ongoing data
collection, and reflects trends in the AHS between 2001 and 2009.
The AHS is designed by the U.S. Department of Housing and Urban
Development and the U.S. Census Bureau to capture a relatively
large amount of information about the physical characteristics of
the units in which Americans live. Characteristics are tabulated
not only by the age of the occupants and structure type, but by
community type. Based on the information available in the AHS,
three types of 55+ communities can be defined: age-qualified active
adult communities, other non-age-qualified 55+ owner-occupied
communities (those that are not explicitly age-restricted but
nevertheless are occupied by adults age 55 +), and age-restricted
rental communities. The AHS first began asking the relevant
questions on 55+ communities in 2001.
The MetLife Mature Market Institute®
The MetLife Mature Market Institute is MetLife’s center of
expertise in aging, longevity and the generations and is a
recognized thought leader by business, the media, opinion leaders
and the public. The Institute’s groundbreaking research, insights,
strategic partnerships and consumer education expand the knowledge
and choices for those in, approaching or working with the 40+
market.
The Institute supports MetLife’s long-standing commitment to
identifying emerging issues and innovative solutions for the
challenges of life. MetLife, Inc. is a leading global provider of
insurance, annuities and employee benefit programs, serving 90
million customers in over 60 countries. Through its subsidiaries
and affiliates, MetLife holds leading market positions in the
United States, Japan, Latin America, Asia Pacific, Europe and the
Middle East. For more information, please visit:
www.MatureMarketInstitute.com.
NAHB
The National Association of Home Builders is a Washington-based
trade association representing more than 160,000 members involved
in home building, remodeling, multifamily construction, property
management, subcontracting, design, housing finance, building
product manufacturing and other aspects of residential and light
commercial construction. NAHB is affiliated with 800 state and
local home builders associations around the country. NAHB’s builder
members will construct about 80 percent of the new housing units
projected for this year. Follow NAHB on Twitter at
www.twitter.com/NAHBMedia.
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