Homebuilders hope boomers beat a new path to their doors
DALLAS – Baby boomer buyers fueled a big run-up in U.S. home construction and sales in the 1970s and 1980s.
Now beleaguered homebuilders say they’re hoping aging boomers, who are just entering retirement age, will once again give them robust housing sales.
“We believe this segment of the market is going to lead the housing industry toward recovery as the market turns around,” said Sharon Dworkin Bell, a senior staff vice president of the National Association of Home Builders.
The 55-plus homebuyer is being targeted by builders all over the country and was a focus of the industry’s annual conference recently in Las Vegas.
The numbers are certainly there. By 2014, a quarter of the U.S. population – more than 85 million people – will be 55 or older.
“The number of people in that age group is increasing, and there is a lot of promise out there,” builders association economist David Crowe said last week.
While more than 60 percent of 55-plus homeowners say they want to keep their current homes, the rest say they are interested in alternatives.
Builders anticipate that buyers in this age group will account for almost 270,000 house purchases by next year.
Even in the down market, some 55-plus buyers move and downsize.
“The good news is they usually have a lot of home equity and can get a mortgage,” Crowe said. “The bad news is they have to sell a house.”
More than 75 percent of 55-plus buyers say they want a home in the suburbs.
But that doesn’t mean they want a big house. Surveys show older buyers are more frugal about housing needs.
“The 55-plus buyers are not interested in growing their house size,” Crowe said. “They are asking for about a 1,900-square-foot home” on average. “They’re worried about energy costs.”
Most older homebuyers surveyed are holding down their cost expectations, industry research shows.
“When we asked the consumer, ‘What are you willing to pay?’ they said $190,000,” Crowe said. “And when we asked the builders, ‘What are you building (for this market)?’ they said $287,000.
“Obviously, there’s a real big problem there.”