Mortgages Blog

Finance Blogs » Mortgages » Boomers to swamp housing market?

Boomers to swamp housing market?

By Judy Martel · Bankrate.com
Monday, May 7, 2012
Posted: 5 pm ET

It could be a buyers' market for years to come. In addition to the pending foreclosures that will continue to depress home prices when they hit the market, many experts predict baby boomers will begin flooding the market with homes for sale. Meanwhile, many younger potential buyers are hesitant to become homeowners and are renting instead.

A report by the Bipartisan Policy Center says as boomers downsize, approximately 26 million homes will come on the market by 2030. But younger generations are stymied by unemployment, tight credit, higher levels of debt than their parents and loss of confidence caused by the housing bust.

The report points to the Northeast and Midwest as areas that will feel the effects the most, and says it's already happening in some states hard-hit by the recession, such as Michigan.

But not everyone is worried. Walter Maloney, of the National Association of Realtors, told CNBC that boomers unloading their homes will not have a big effect on the market because there is still pent-up demand for homes. In fact, the number of homes on the market has declined by almost half what it was a year ago. Greg McBride, CFA, senior financial analyst at Bankrate, says there are still plenty of foreign buyers interested in U.S. properties and cautions against predicting whether seniors will have an effect on the housing market in the coming years.

Keep up with your wealth and mortgages and follow me on Twitter.

Get more news, money-saving tips and expert advice by signing up for a free Bankrate newsletter.

«
»
Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
22 Comments
Harley Spoon
June 21, 2012 at 4:14 pm

Getit Qwik, bY "THE GOVERNMENT" as it relates to property taxes, which government do you mean? Do you mean your town gov'ment, the city gov'ment, teh school dist gov,ment", the county gov'ment or the state gov'ment??? The federal gov'ment doesn't have a property tax, per se!

myother
June 21, 2012 at 2:57 pm

I've been hearing from realtors that the housing market was turning around since 2008. I think they are right. The market has gone around and around, it just has not gone up.

Jake
June 19, 2012 at 11:33 am

buying a home is usually a losing proposition. Unless you happen to have bought some property with the home that appreciates exponentially, which is what happened with one of my uncles.

A home should be about putting down roots, establishing a family, presence, et. You can't put a value on that. The fact that many families are moving around, being uprooted because of the economy, losing homes, is a testatment to the increasing devaluation of our society. Speculators come into neighborhoods and buy foreclosed properties, just to 'flip' them and make a quick buck, or turn them into rental units, and capitalize on the ever-cheapening values of houses; what used to be, homes.

ctl
June 15, 2012 at 5:28 pm

Simple don't borrow more than you can afford and be risk adverse. This is a buyers market with record low interest rates, you would be stupid not to buy. Too many people think they have to start at the top of the market, news flash, in life you work your way up.

John Davis
June 14, 2012 at 7:29 pm

The reason why some realitors are not worried is because all the foreclosed homes are not on the market yet.... banks have been slow to release them creating a weaker supply. Part of that is because of the number of homes still left to process, some of it is because of the "robo-signer" issue, and I am sure that some of it is that if there are too many homes on the market the price goes down and they are not able to recover any value invested... problem is as the homes sit they rot away making them less valuable to begin with.

Jean
June 14, 2012 at 7:47 am

When our 29-yo son went to check out a rental in DC that accommodates 5, and that had 2 openings, there were about 50 potential tenants who showed up. Rents in the area are ridiculous.

Still, we advise him to never buy a home. From our experience (broke even on one home, took a loss on another and will likely lose on our current home), unless you're a handyman, it's not an emotionally- or financially-wise move. When you must move to stay employed you cannot choose to sell in the up years, and with increasing job insecurity, forced home-selling because of job relocation is becoming more common.

Getit Qwik
June 13, 2012 at 10:48 pm

You never actually own property in the United States, property taxes are so unfair, you pay them yearly and cannot actually quit paying them. Some discounts for seniors or homestead but all in all taxes are outrageous, poverty is an option our government likes to keep on millions of Americans. We need to stop that option. "POVERTY IS NOT A VALID OPTION."

EMMAN IDIOT
June 13, 2012 at 9:34 am

The National Ass. of Realtors totally wants to paint a rosy picture. Where are the jobs? High student debt which will make them rent longer and the critera to get a loan, now the loan payment cant be over 30% of your gross, unless you get and the offer a new crack head loan. Now lets hope the interest rates stay low. The NAR painted rosy pictures in 2007 saying there would only be only a 10% decline in values.
HELLO!

Bruce Fernandes
June 12, 2012 at 12:43 pm

This article is full of it.

The fact is the market will drive renters into becoming homebuyers. Just wait for 2-3 years of annual rent increases far above the inflation rate. I guarantee you that people will not tolerate annual rent increases of 10% when their incomes are not going up that much. Furthermore, it will become apparent that the collapse is once in a lifetime event and home ownership is the only clear ticket to self-sufficiency.

Buy a home today. Pay it off in 30 years. Say the home is worth what you paid for it 30 years ago... that's better than what you have after 30 years of rent and that doesn't take into account all the intangibles of owing a home top of list is not living like a sardine in a can.

Howdy
June 09, 2012 at 11:14 am

Meanwhile, many younger potential buyers are hesitant to become homeowners and are renting instead.

Talk about the Spin Doctor : With no Job security (people use to have some confidence they could pay a 30 year Mortgage), With Wages continuing to slide (total Wage Package : Health, Pension, wage)

Lets face it : Socialized Housing will be the only answer (you will not own a Home; once America's safest investment)