Their decisions are directly impacting housing availability for younger generations while simultaneously creating new opportunities in certain market segments.
Unsurprisingly, Kentucky mirrors this trend, given its relatively older population and high homeownership rates among seniors.
Over 81% of Kentuckians aged 65+ own their homes, slightly above the national average.
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Surveys indicate more than three-quarters of older homeowners nationally plan to age in place in their current residence.
Boomers who locked in low 30-year mortgage rates or paid off their homes have little financial pressure to move.
Researchers anticipated that boomers would choose affinity locations such as college towns for retirement more than the previous generation.
These trends suggest that some Kentucky boomers are embracing urban living for its convenience and social opportunities.
Suburban Stability
In suburban controls, however, many boomers are choosing to stay in place.
With their children grown, these empty nesters often continue to occupy spacious single-family houses.
Kentuckys suburban boomers reflect that norm, preferring familiar neighborhoods and the comfort of a paid-off home.
The slower pace and lower housing expenses in rural areas make it feasible for retirees to stay.
However, some rural boomers are moving closer to regional hubs or medical facilities as they get older.
Regional Differences: Louisville vs. Lexington vs.
Smaller Communities
Louisville Metro
Louisville, Kentuckys largest metro, has a diverse housing landscape for boomers.
Louisvilles urban core is also seeing interest from older adults who enjoy cultural amenities.
Studies predicted that Lexington would attract in-migrating boomers looking for an active retirement in a college town setting.
Many long-time Lexington homeowners have seen significant equity gains.
Others remain in place; Lexingtons boomers, like Louisvilles, show strong attachment to their homes.
Many boomers in these areas remain in their homes because housing costs are relatively low and communities are tight-knit.
If those options arent available, boomers either stay in larger-than-needed homes or move away.
Those gains have enabled some boomers to cash out and relocate either within Kentucky or to lower-cost locales.
Kentuckys low cost of living often means boomers can find such savings without leaving the state.
Downsizing and Lifestyle Changes
As empty nesters, many boomers eventually want a more manageable home.
Downsizing has been a notable trend, though not as widespread as once expected.
In Lexington and Louisville, builders have reported strong demand for patio homes and condos from retiring boomers.
In fact, more than half of boomers say they dont intend to move at all in retirement.
Still, downsizing remains an aspiration for a subset of boomers seeking simplicity or an empty nester lifestyle.
This interest rate lock-in effect has reduced the number of boomer listings and purchases in the past two years.
Additionally, economic uncertainty (e.g.
the 2020 COVID-19 pandemic, inflation in 2022) made some boomers cautious.
Tax Incentives and Policies
Tax considerations also play a role in boomer decisions.
Kentucky offers a homestead exemption for homeowners 65+, shielding a portion of a homes value from property taxes.
This effectively lowers the annual tax bill for senior homeowners and encourages them to remain in their existing homes.
Generational Wealth Transfer Considerations
The looming Great Wealth Transfer has subtle effects on boomer homebuying behavior.
Surveys show that 75% of Boomer homeowners plan to leave much of their wealth to their children.
This means many are treating their homes as an asset to pass on rather than sell.
Additionally, some boomers are helping their children or grandchildren become homeowners, thanks to their own accumulated wealth.
The mindset of preserving generational wealth has likely contributed to boomers holding onto real estate.
Boomers seem inclined to only sell if needed, otherwise retaining property as part of their legacy.
Slower Housing Turnover and Delayed Downsizing
Another shift is in housing turnover and downsizing behavior.
Home tenure has increased significantly.
The result is fewer large suburban homes cycling onto the market for the next generation.
Changing Economic Context
Economic conditions between the two periods also differed.
Many postponed moves until their finances stabilized.
One could argue boomers in the recent period have been more driven by opportunity (e.g.
waiting out the recession, only moving if job or family required).
By 2023, all boomers are over 59, and a large portion are in their 70s.
Consequently, aging in place has become more dominant now than it was when boomers were younger.
