Where do seniors buy houses?
Where do seniors buy houses?

Photo credit: fizkes/Shutterstock

Today’s real estate market remains very difficult for many buyers. With a limited supply of homes and a high number of buyers, prices have skyrockets records over the past two years.

One of the underlying factors contributing to the current state of the market is generational. Real estate experts have Noted that with increasing numbers of older Americans aging in place, fewer homes are available to younger buyers. With millennials (America’s largest generation) currently between the ages of 26 and 41 — a peak time for buying a first or second home — competition in the real estate market has been fierce. And as prices rise, younger buyers with less savings or less pre-existing home equity than older buyers may find it even harder to buy.

Unfortunately for younger buyers, homeownership among older Americans remains high. In 2012, the year after the first baby boomers turned 65, the homeownership rate for those aged 65 and over peaked at 81.1%. Starting in 2013, this rate decreased slightly each year until 2018, when the rate fell to 78.5%. But in 2020, that number has risen to 80%, or about 27.1 million homeowner households out of the 33.9 million U.S. households of retirement age.

This trend may be partly attributable to the higher number of affluent baby boomers entering the 65+ age bracket. With over 71 million baby boomers check an estimate 70 trillion dollars of wealth, the share of owners aged 65 and over could continue to increase as the last member of the baby boomer cohort reaches that age. Despite recent swings in the homeownership rate among older Americans, the gross number of retirement-age homeowners has increased by more than 40% over the past decade.

But beyond simple demographic trends, many older Americans are also active buyers, looking for homes that fit their lifestyle preferences later in life. According to data from the National Association of Realtors, the most common reasons older buyers buy are to be closer to friends and family or to find a smaller home. Older homeowners with these motivations often trade one house for another, rather than vacate the property altogether. Adults of retirement age have also faced many of the same purchase motivations related to the pandemic in 2020, which has translated into vast increases in the homeownership rate across all age cohorts.

Many places where older Americans are buying homes are Sun Belt locations that have been attracting retirees for years. States like Arizona, Florida and Nevada have large numbers of older people moving in, attracted by pleasant climates and a more affordable cost of living than many northern cities. But the top state where seniors are buying homes is actually Delaware, where homebuyers age 65 or older accounted for 15.1% of homebuyer loans in 2020. Delaware benefits for seniors, low property taxes, tax breaks on pensions and 401k income, and no state sales and estate taxes, all of which help seniors maintain disposable income more important and allow them to transfer a greater part of their heritage to their heirs.

But on a metropolitan level, Sun Belt’s top retirement destinations are home to most of the best locations for older homebuyers. Of the major metros, an overwhelming majority are located in Arizona, Florida, California, and the Carolinas. In some of those places, buyers over the age of 65 accounted for more than 20% — and up to nearly 50% — of all homebuyer loans in 2020.

The data used in this analysis comes from the Federal Financial Institutions Examination Council Residential Mortgage Disclosure Act. Only conventional home loans initiated in 2020 were taken into account. To determine where the most seniors are buying homes, researchers from Construction site coverage calculated the share of loans for the purchase of a home in 2020 accounted for by buyers aged 65 or over.

Here are the metropolitan areas where seniors are buying homes.

Big metros where old people buy houses

Photo credit: Sean Pavone/Shutterstock

15. Richmond, Virginia

  • 65+ share of home purchase loans: 7.4%
  • Median loan amount: $225,000
  • Median property value: $325,000
  • Median loan-to-value ratio: 80.0%
  • Median interest rate: 3.13%

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14. San Diego-Chula Vista-Carlsbad, CA

  • 65+ share of home purchase loans: 7.4%
  • Median loan amount: $425,000
  • Median property value: $685,000
  • Median loan-to-value ratio: 69.4%
  • Median interest rate: 3.13%

Photo credit: Sean Pavone/Shutterstock

13. Birmingham-Hoover, AL

  • 65+ share of home purchase loans: 7.8%
  • Median loan amount: $175,000
  • Median property value: $255,000
  • Median loan-to-value ratio: 80.0%
  • Median interest rate: 3.13%

Photo credit: Sean Pavone/Shutterstock

12. Tulsa, okay

  • 65+ share of home purchase loans: 7.9%
  • Median loan amount: $165,000
  • Median property value: $225,000
  • Median loan-to-value ratio: 80.0%
  • Median interest rate: 3.13%

Photo credit: f11photo / Shutterstock

11. San Antonio-New Braunfels, TX

  • 65+ share of home purchase loans: 8.2%
  • Median loan amount: $195,000
  • Median property value: $275,000
  • Median loan-to-value ratio: 80.0%
  • Median interest rate: 3.25%

Photo credit: Andrew Zarivny/Shutterstock

10. Sacramento-Roseville-Folsom, CA

  • 65+ share of home purchase loans: 8.4%
  • Median loan amount: $315,000
  • Median property value: $485,000
  • Median loan-to-value ratio: 75.0%
  • Median interest rate: 3.13%

Photo credit: Sean Pavone/Shutterstock

9. Miami-Fort Lauderdale-Pompano Beach, Florida

  • 65+ share of home purchase loans: 8.5%
  • Median loan amount: $225,000
  • Median property value: $325,000
  • Median loan-to-value ratio: 75.0%
  • Median interest rate: 3.25%

Photo credit: Jon Bilous / Shutterstock

8. Virginia Beach-Norfolk-Newport News, VA-NC

  • 65+ share of home purchase loans: 8.9%
  • Median loan amount: $215,000
  • Median property value: $315,000
  • Median loan-to-value ratio: 80.0%
  • Median interest rate: 3.25%

Photo credit: Sean Pavone/Shutterstock

7. Orlando-Kissimmee-Sanford, Florida

  • 65+ share of home purchase loans: 9.2%
  • Median loan amount: $205,000
  • Median property value: $285,000
  • Median loan-to-value ratio: 80.0%
  • Median interest rate: 3.25%

Photo credit: Matt Gush/Shutterstock

6. Riverside-San Bernardino-Ontario, CA

  • 65+ share of home purchase loans: 10.0%
  • Median loan amount: $275,000
  • Median property value: $415,000
  • Median loan-to-value ratio: 75.0%
  • Median interest rate: 3.13%

Photo credit: CHARLES MORRA / Shutterstock

5. Jacksonville, Florida

  • 65+ share of home purchase loans: 11.4%
  • Median loan amount: $205,000
  • Median property value: $305,000
  • Median loan-to-value ratio: 79.8%
  • Median interest rate: 3.25%

Photo credit: Sean Pavone/Shutterstock

4. Tampa-St. Petersburg-Clearwater, Florida

  • 65+ share of home purchase loans: 11.7%
  • Median loan amount: $175,000
  • Median property value: $245,000
  • Median loan-to-value ratio: 80.0%
  • Median interest rate: 3.37%

Photo credit: Sean Pavone/Shutterstock

3. Phoenix-Mesa-Chandler, Arizona

  • 65+ share of home purchase loans: 12.1%
  • Median loan amount: $235,000
  • Median property value: $335,000
  • Median loan-to-value ratio: 79.6%
  • Median interest rate: 3.25%

Photo credit: Sean Pavone/Shutterstock

2. Las Vegas-Henderson-Paradise, NV

  • 65+ share of home purchase loans: 12.7%
  • Median loan amount: $245,000
  • Median property value: $335,000
  • Median loan-to-value ratio: 80.0%
  • Median interest rate: 3.25%

Photo credit: Sean Pavone/Shutterstock

1.Tucson, AZ

  • 65+ share of home purchase loans: 18.5%
  • Median loan amount: $195,000
  • Median property value: $275,000
  • Median loan-to-value ratio: 80.0%
  • Median interest rate: 3.25%

Detailed results and methodology

The data used in this analysis comes from the Federal Financial Institutions Examination Council Residential Mortgage Disclosure Act. Only conventional home loans initiated in 2020 were taken into account. To determine where the most seniors are buying homes, the researchers calculated the share of home purchase loans in 2020 accounted for by buyers aged 65 or older. In the event of a tie, the location with the highest median loan amount was ranked higher. To improve relevance, only metropolitan areas with at least 100,000 inhabitants were included. Additionally, metros were grouped into cohorts based on population size: small (100,000 to 349,999), medium (350,000 to 999,999), and large (1,000,000 or more).

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