Which Group Holds Key to Housing Recovery?

According to Walt Maloney, National Association of Realtors®, the boomer generation is chomping at the bits to move.  That generation is better equipped than at any other time to buy because of the all-time record home affordability.  In addition, most have been in their homes for a number of years and have been able to weather the housing crisis better than any other group as a whole.

The affordability index has reached 176.9.  By contrast the rate was 137 in 2008 and a very low 68 in 1981.  The current affordability index means that someone who buys with 20% down can expect to get a home worth 176.9% more than the average price home.

Sharon Bell, National Association of Home Builders, says that boomers are looking to change their lifestyle.  They no longer want to be in large, multi-story homes with lots of maintenance responsibilities.  They want the convenience of single story homes in retirement communities where maintenance is managed through a homeowner’s association and there are many amenities nearby for recreation and shopping.

The problem is younger potential homeowners do not have the finances to buy.  As soon as there is a movement of more buyers entering the first time homebuyer market, the boomers will be quick to put their homes on the market to move, in many cases to up-scale, planned retirement communities.