In our youth-obsessed culture, I had reason this week to think about the upside of getting older. It may have been prompted by some exciting personal news - learning on Mother's Day that my son and daughter-in-law are expecting their first child in November. I am so thrilled! Even in spite of the - gulp - grandmother moniker!
There are other advantages to aging..... wisdom, the ability to say and do things more freely, more confidence to trust your instincts. Apparently aging brings something else..... the ability to buy homes! 42% of buyers in the US are aged between 60 and 78, and vastly outnumber millennials. 40%-50% of those older than 60 are able to buy with cash while over 90% of millennials rely on a mortgage.
How else does aging impact the real estate market?
1. People are living longer, more productive lives. For many, things seem to happen later in life including family formation, having kids and buying their first home. Many are starting new careers in their 50's and 60's.
2. As life expectancy grows - especially for wealthier people with access to the best medical care - many people are inheriting later in life too, which may partially explain the volume of 60+ year old buyers. Someone who is 65 years old may have a parent who is 90 years old.
3. The volume of older cash-rich buyers - whether from savings, extended investment compounding growth, or the sale of a business - provide an insulator for real estate markets overall.
4. Older generations accustomed to owning large homes that may have appreciated in value over the decades are armed with capital to buy two or more homes in different locations.
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