Housing Turnover by Older Owners: Implications for Home Improvement Spending as Baby Boomers Age into Retirement
W11-4: As baby boomers relocate or downsize in retirement, or simply die off, they will release a very large amount of housing onto the market. Older homeowners (age 55+) accounted for about one third of housing turnover in the U.S. between 1997 and 2007, and this share will increase as the large baby boom generation continues to age into their retirement years. This inevitable turnover of housing units will have considerable implications for home improvement spending as the new occupants update or reconfigure homes to fit their needs. This paper examines how the turnover in housing by the cohort immediately preceding the baby boom generation might lend insight into the housing and home improvement markets over the next two decades. The experience of these older cohorts provides insight into the characteristics of housing likely to turn over in the coming decades, as well as the types of households likely to purchase them. Our research finds that older sellers generally live in their home for many years and they sell relatively older housing stock to much younger buyers, which generates significant levels of home improvement spending after the sale. Yet, a declining mobility rate in recent years also suggests more baby boomers may choose to stay in their homes and age in place. Whether aging in place implies significant upgrading to their homes to accommodate their changing needs remains to be seen. Certainly the housing choices made by baby boomers as they age into retirement years, and as the housing market begins to improve, will dramatically affect the size and composition of home improvement spending in the years and decades ahead.