In previous generations, when homeowners reached a certain age, they started thinking about reverse mortgages and even assisted living. But many of today’s seniors are looking to buy a home, opting to downsize or even buy their dream place.
New data from the National Association of Realtors® shows that, together, young baby boomers, older baby boomers, and the silent generation comprised 39 percent of the buyers in 2019. Senior-related housing only accounted “for 13 percent of buyers over the age of 50; that number was eight percent for buyers 54 to 63 years and 29 percent for buyers 73 years and older.”
If you're in one of these demographics and are weighing the pros and cons of buying a home, read on. There are a number of factors to consider as an older buyer.
New or existing?
The top reasons to purchase an existing home include: a more established neighborhood and the kind of character and architectural detail you don’t often find in newer homes today. But, there are tradeoffs. You won’t get all the modern building features that make newer homes so ideal for those who don’t want to deal with updates and repairs. Newer homes are more energy-efficient and less drafty, for starters, and newer appliances and heating and cooling systems are less likely to break down.
When you consider that older generations want to minimize the maintenance involved in their home, it’s no surprise that, “Nineteen percent of buyers 64 to 72 years bought new homes, followed by buyers 54 to 63 years at 18 percent”—the two largest groups buying new construction last year, according to the NAR report.
It is a good financial move?
“If you're planning to take out a mortgage to make your home purchase when you're in or about to enter retirement, look carefully at the financial impact,” said The Motley Fool. “Consider your financial situation to be sure you will be able to make the payments throughout the life of the mortgage, even if your income drops after retirement or if a spouse passes away. Review any life insurance policies you have for you and your spouse or consider getting insurance.”
One story or two
For many older homebuyers, the desire to downsize isn’t so much a matter of square footage—although that is a factor—as it is a need to limit the risks associated with stairs. Buying a one-story home may not be feasible if they’re not as abundant as two-story homes, or if they’re not in budget. A home that has a master bedroom on the first floor is another alternative, allowing you to live as though you’re in a single-story home with room for guests upstairs.
Where should you move?
Many moves among older demographics today are driven by the desire to be near loved ones. According to the NAR report, “Among the 63 and older age groups, the desire to be closer to friends and family was the top reason to purchase.”
But it’s also important to consider your lifestyle; Think about the things you enjoy, like hobbies, and the things you need, like quality medical care nearby. That will help you determine the best place to move.
“Are you buying because you are moving to a new location to enjoy your retirement? If so, have you spent significant time in this new location to be sure you love it before making it a permanent home? It would be terrible to uproot your life and move to Florida only to realize you miss your grandkids or you don't really like the heat, bugs, or the company of other retirees,” said The Motley Fool. “If you plan to do significant traveling in retirement, consider how much it will cost to pay for lawn care and other maintenance while you are away. Moving to a condo or retirement community that does the lawn care for you may be a better plan.”