Government sponsored lender Freddie Mac reports that three quarters—75%—of Baby Boomer homeowners plan to leave their current home or the proceeds from the sale of their home to their children or family members when they pass on.
Freddie Mac’s latest analysis of the housing perceptions, preferences and plans of Baby Boomers, released Dec. 19, also found that nearly as many—68% Boomers—are planning to “age in place,” meaning they will not be moving to a different home to live out their retirement years. Back in April, a study conducted by Redfin found 78% all Boomers plan to stay in their current home for retirement.
Their children—Gen X and Millennials—will benefit from a “silver tsunami,” Freddie Mac said the new report, thanks to the skyrocketing value of real estate in recent years. The report estimates Boomers will leave much of their $17 trillion in home equity to their children.
The majority of Boomers who own a home said they feel confident they will have a financially comfortable retirement. This is accompanied by a growing preference of some Boomers to downsize.
“As the youngest Baby Boomers turn 60 this year, 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,” said Sonu Mittal, SVP and head of Single-Family Acquisitions at Freddie Mac. “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.”
Freddie Mac has surveyed and tracked the attitudes of Boomers for nearly a decade. As of 2024, there were 65 million Baby Boomers, accounting for 20% of the U.S. population and 36% of total homeowner households. Total household net worth has increased by approximately $44 trillion, or $332,000 per household, since the pandemic (Q4 2019 to Q2 2024). Of that, Boomer overall wealth increased by $19 trillion, or $486,000 per household, half of which is due to house price appreciation.
This latest research follows two prior surveys, the first in 2016 and again in 2021, in which Freddie Mac sought to track Boomers’ attitudes and perceptions in several key categories. Key findings include:
Perceptions of retirement
- Retired homeowners feel more confident than non-retired homeowners in believing they will have a comfortable retirement: 68% of Boomer homeowners surveyed express confidence in having a comfortable retirement, regardless of race. This is down from 2016 (76%) and 2021 (81%).
- Aging in place remains preferable, but new trends have emerged: As in 2016 (66%) and 2021 (69%), Boomer homeowners again feel confident they would remain in their current homes, with 68% of respondents indicating they either plan to age in place or do not have plans to move again.
- Downsizing: However, of Boomer homeowners looking to move at some point in the future, 66% indicate they also plan to downsize, with nearly 9 out of 10 respondents currently owning a residence with three or more bedrooms. Of the Boomer homeowners who moved in the last decade, 36% say they downsized from their previous property.
- Living Near Children: Of the 32% of Boomers who would consider living in a smaller, independent living area on someone else’s property, such as an accessory dwelling unit, the vast majority (68%) of Boomer parents would consider living on their children’s property.
- Men vs. Women: 40% of women expressed a willingness to move in with their adult children in the future, while only a quarter of men felt similarly.
Younger generations stand to benefit
The research found younger generations are positioned to receive trillions in home equity from Boomers with proper estate planning.
- According to Federal Reserve data, Boomers hold 50% of the nation’s home equity, amounting to $17.3 trillion as of the second quarter of 2024. However, the torch is slowly being passed, with intentions to share the wealth with children and family members.
- Regardless of race or gender, 75% of surveyed Boomer homeowners are planning to leave their current home or the proceeds from the sale of their home to their children or family members after they pass away.
Boomers to protect home equity
- Surveyed homeowners who currently have or used to have a fixed-rate mortgage overwhelmingly agree (83%) that it has allowed them to steadily build wealth over time.
- To fund their retirements, Boomer homeowners believe they will tap sources other than their home equity, including savings, Social Security, retirement and investment accounts, and pensions. Only 9% of Boomer homeowners surveyed plan to use their home equity or a reverse mortgage to fund their retirement.
- Half of Boomer homeowners surveyed already own their home outright and 53% of those still paying off a mortgage have an interest rate below 4%.
“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.
Freddie Mac’s 2024 online survey included interviews with 3,003 homeowners and renters aged 60-78, with data weighted to be representative of a national sample of U.S. adults within the Baby Boomer generation.
SEE ALSO:
• Americans Resolve to Focus on Finances in 2025
• The Jolliest Retirement Facts of 2024
• Americans Resolving to be ‘Practical’ Financially in 2025
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
