Baby Boomers have a home-ownership rate higher than the national average, and one in four Boomers owns more than one house, a new survey shows.
Results of the survey of 2,000 Americans born between 1946 and 1964, conducted by Harris Interactive, were released during the midyear meetings of the National Association of Realtors. Nearly eight in 10 Boomers own their own homes; the Census Bureau puts the overall home-ownership rate at 69 percent.
Almost 90 percent of the Boomers surveyed have owned property at some point, the Harris results showed, and almost 96 percent believe owning a home is a good financial investment.
One-quarter of those responding to the survey own one or more other kinds of real estate in addition to a primary residence: 13 percent own land; 8 percent own rental property; 7 percent, a vacation home or seasonally occupied property; 2 percent, commercial real estate; and 3 percent, some other kind of real estate.
Though the Baby Boomer market remains a significant source of buyers for builders, David Lereah, the NAR’s chief economist, said marketing to this generation can be a challenge.
In a presentation on the survey’s results, Peter Francese of Harris Interactive counted 77 million Boomers, accounting for 35 percent of all U.S. adults.
Of the 77 million, 73 percent are white, non-Hispanic; 12 percent, black; 10 percent, Hispanic; and 4 percent, Asian.
“As a group, Boomers are in their peak earning years and continue to wield great influence in the U.S. economy,” Lereah said. “But they are not homogeneous. There are significant variances in needs, behavior, attitudes and resources.”
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While Boomers appear to have “an almost insatiable desire” for real estate, many have not adequately planned for retirement, Lereah said. “What should not be overlooked are the discretionary spending interests of this generation, and their appreciation of housing as a great investment,” he said.
A Realtors association analysis shows Baby Boomers are proportionately more active in the second-home market, owning 57 percent of all vacation/seasonal homes and 58 percent of rental property.
For the Boomer segment that owns rental investment property, 34 percent own more than one. Of those who own vacation homes or seasonally occupied property, 13 percent said they owned two or more of them. Forty percent of the 2,000 survey respondents said they intended to make the vacation home or seasonal property a primary residence eventually.
Historically, the Realtors group’s survey data have shown that only one in five intended to do so when first buying such a property. This has emerged as a Boomer investment strategy, Lereah said.
“Some Boomers will take advantage of generous capital-gains exclusions from their taxes when they sell their primary residences, and then place themselves in the position of being able to convert a vacation home into their new primary residence, which would later become eligible for the same tax treatment,” he said.
“Then, if their needs change in the future, they’ll be able to take the capital-gains tax break after they have lived in that home as their primary residence for two out of the five previous years,” Lereah said. “It becomes a great way to build and protect a nest egg.”
In the Harris survey, Francese found that Boomer owners of expensive homes are more likely to be very happy with their houses, and men are more likely to be satisfied with their homes than women are. The average Boomer homeowner has lived in his or her house more than a dozen years, while Boomer renters don’t move for an average of eight years, Francese found.
Boomer homeowners told Harris Interactive that they planned to live in their houses for 14 more years, while renters expect to stay for four more years. Three in four Boomers are now in the workforce, but 10 percent told Harris that they were retired, Francese told the Realtors’ group.
Only 29 percent of the Boomers surveyed said they were not at all likely to work after getting Social Security benefits, while three in four said they are not financially prepared for retirement.