Here’s one reason that builders may not be constructing the starter homes that have remained elusive for many millennial buyers: They’re focused on their parents.
The market for homes catering to residents age 55 and older hit a record high in the fourth quarter, according to a new report from the National Association of Home Builders. The 55+ housing market index jumped 14 percent in the quarter amid strong sales, expected sales and traffic of prospective buyers. The index for 55+ condos fell slightly in the quarter, but remains at twice 2012 levels.
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With 10,000 Boomers a day turning 65, the market for housing them is huge, especially as they realize that now might be a good time to sell the empty nest that has gone up in value over the past few years. Builders like Boomers since they tend to be wealthier than younger buyers and have an easier time qualifying for mortgages, if they even need one at all to purchase their next home.
Homes built for older residents typically have the design features such as a master bedroom on the first floor and no-step showers, which give Boomers confidence that they’ll be able to stay in these homes well into their senior years.
Newer developments catering to this age group may be more appealing than existing ones, since they’ll tend to have a younger average resident age. After all, even if today’s Boomers are aware that they’re aging, many don’t want to move into a community where “old” people live.