Freddie Mac‘s most recent survey of baby boomer housing opinions, preferences, and plans indicates that roughly three quarters of homeowners born before 1964 are likely to pass a large portion of their $17 trillion in home equity to their offspring.
The majority of boomers who own a home are certain they will enjoy a pleasant retirement, according to Freddie Mac’s recent, extensive study of respondents aged 60 and over. Alongside this, some baby boomers are becoming more and more interested in downsizing.
“As the youngest baby boomers turn 60 this year,” said Sonu Mittal, SVP and Head of Single-Family Acquisitions at Freddie Mac, “this research provides an opportunity to learn from a generation that has weathered multiple economic cycles and pivotal moments in recent history, including the Great Financial Crisis and pandemic.”
For almost 10 years, Freddie Mac has conducted surveys and monitored baby boomer sentiment. In 2024, there were 65 million baby boomers, making up 36% of all homeowner families and 20% of the U.S. population. Since the epidemic, the average household net worth has risen by almost $44 trillion, or $332,000 per household (Q4 2019 to Q2 2024). House price appreciation is responsible for half of the $19 trillion increase in boomer wealth, or $486,000 per household.
“The value we see placed on homeownership and its contribution to the long-term financial success of American families underscores the importance of our mission to make home possible for more families across the country,” Mittal said.
This most recent study comes after two earlier studies conducted by Freddie Mac in 2016 and 2021, which aimed to monitor boomers’ opinions and attitudes in a number of important areas. Key findings include:
Retirement perceptions.
Regardless of race, some 68% of boomer homeowners surveyed say they are certain they will have a decent retirement. Compared to 2021 (81%), this is lower than in 2016 (76%). Homeowners who are retired are more certain than those who are not that they will enjoy a comfortable retirement.
Many are choosing to age in place, but new trends have surfaced.
- Aging in Place: With 68% of respondents saying they either plan to age in place or do not have plans to relocate again, baby boomer homeowners are once again certain they would stay in their current houses, as they were in 2016 (66%) and 2021 (69%).
- Downsizing: Buying a smaller home is something that 66% of boomer homeowners who intend to relocate at some time in the future also intend to do. Almost 90% of respondents currently own a home with three or more bedrooms. Some 36% of boomer homeowners who have moved within the past ten years report downsizing from their prior residence.
- Living near children: The majority of boomer parents (68%) would think about living on their children’s property, while 32% of boomers would contemplate living in a smaller, independent living area on someone else’s land, such as an additional housing unit.
- Men vs. Women: Only 25% of men said they would be open to living with their adult children in the future, compared to 40% of women.
“Clearly the baby boomer generation has benefited from our country’s unique housing finance system, and it is imperative that we ensure this system remains in place to help boomers and the many generations that follow,” Mittal said. “To that end, Freddie Mac has led on efforts to help homeowners access the equity in their home without affecting their interest rate, created offerings that help defray downpayment and closing costs, and enhanced our technology to help those with thin credit files qualify for a mortgage.
With careful and proper estate planning, boomers can leave trillions of dollars in home equity to younger generations.
As of Q2 of 2024, baby boomers owned $17.3 trillion, or 50% of the country’s home equity, according to figures from the Federal Reserve. With plans to distribute their wealth among family members and children, the torch is being handed gradually, nevertheless.
According to a survey, roughly 75% of boomer homeowners, regardless of gender or race, intend to leave their existing residence or the money from the sale of their house to their surviving children or relatives.
In retirement, boomers plan to safeguard their home equity.
Homeowners surveyed who currently have or formerly held a fixed-rate mortgage strongly agree (83%) that it has enabled them to gradually accumulate wealth over time. Boomer homeowners anticipate using social security, retirement and investment accounts, pensions, and savings in addition to their home equity to finance their retirements.
According to a poll, just 9% of boomer homeowners want to finance their retirement via reverse mortgages or their home equity. An estimated 53% of boomer homeowners who are currently making mortgage payments have interest rates below 4%, and half of those surveyed already own their home outright.
“With an eye toward the future, we also expanded our efforts to educate the public about homeownership and created resources to help owners appropriately plan for the transfer of wealth to their children and families.”
To read more about estate planning and equity trends, click here.
