ORLANDO — With the 55+ population expected to exceed 85 million by 2014, the residential construction trade – including home builders and remodelers – has been increasingly catering to the unique needs and interests of mature homebuyers, according to a new study by the National Association of Home Builders.
The study, released by the Washington, DC-based NAHB in conjunction with the recent International Builders’ Show here, reveals that more than 250,000 people will opt to buy new housing in communities specifically built for ages 55 or better, and more than 100,000 units constructed in 2008 will be targeted to this growing niche market.
The report also dispels some common perceptions about the older home buyer: first, that “downsizing” is a relative term and, second, that the vast majority of these buyers won’t be relocating to the Sun Belt.
“Our data shows that 55+ home buyers may be ‘downsizing,’ but not by much,” says Paul Emrath, NAHB’s lead researcher on the study. “The average home in an active adult community still includes more than two bedrooms and more than 2,000 sq. ft. of living space.”
The report found that homes in age-restricted active adult communities were only slightly smaller than other homes purchased by 55+ home buyers in both square footage and the total number of rooms. In addition, the majority of age-restricted housing buyers (59%) indicated they felt they were moving into a better home than their previous one.
“These boomer buyers may be scaling back in their home size, but they aren’t willing to sacrifice quality,” said Robert Tippets, immediate past chairman of the NAHB 50+ Housing Council.
The report also suggests that new home buyers in this niche market are not as adversely affected as other home buyers by the current troubles in the mortgage market. Fewer than half of the customers who bought a new home in an age-qualified active adult community needed to take out a mortgage. Of those who did, the study found, the loan-to-value ratio was under 50%. Nearly all home buyers in these communities who made a down payment reported that the down payment came from the sale of a previous home.
Notes Mark Stemen, senior v.p. with K. Hovnanian’s active adult division in the mid-Atlantic and a member of NAHB’s 50+ Housing Council, “Given the strong demographics of the Baby Boom generation, the active adult buyer will continue to be a very important housing consumer for a long time to come.”