Baby Boomer homeowners are buying and selling homes at a rapid clip, representing the largest segment of residential home sales in the twelve months ending in July 2021, according to the “Home Buyers and Sellers Generational Trends Report” published on March 23, 2022 by the National Association of REALTORS® Research Group. This was broken down into sales by younger boomers (23 percent) and older boomers (19 percent). On the buy side, younger boomers represented 17 percent of total purchasers, and older baby boomers 12 percent for a total of 29 percent of the market.
The baby boomer generation, born between 1946 and 1964, is approximately 73 million strong. “Younger Baby Boomers,” aged 57 to 66, were viewed separately from “Older Baby Boomers,” now aged 67 to 75. Home ownership trends of the “Silent Generation,” born in 1925 to 1945, were also analyzed as part of the report. The buying and selling patterns of these three older groups were viewed separately due to differences in demographics and homebuying characteristics.
Baby Boomer Housing Trends
Below are some key findings from NAR report regarding baby boomer homeowners.
On the buy side, younger boomers represented 17 percent of the market, slightly ahead of the older boomer group at 12 percent of recent home buyers.
Retirement, the desire to be closer to friends and family, and downsizing were all reasons behind baby boomer decisions to buy or sell a home.
Younger boomers have a 20-year outlook for the new home they purchased, with many likely to purchase in a rural area. Small towns had special appeal to both younger and older baby boomer homebuyers.
Baby boomers purchased new homes more often than younger buyers, primarily due to a desire to avoid costly renovations and repair problems with plumbing or electrical systems. The ability to customize a new home as well as the amenities associated with new home communities also contributed to baby boomer homebuying patterns.
Older baby boomers moved a median of 35 miles from their previous location, while younger boomers stayed closer to home with a median move of 28 miles. This fact alone can help loan officers target their marketing efforts geographically.
The vast majority (87 percent) of all homebuyers financed their new home purchase, most often with a conventional mortgage. This was true for baby boomers also, with 78 percent of younger boomers and 67 percent of older boomers relying on a home mortgage. Many boomers used proceeds from the sale of a previous home to help offset the cost of their new home purchase.
Student loan debt was a factor for only 9 percent of younger boomers, although they carried the highest median student loan debt level at $42,000. Some of this educational debt is presumed to be from financing their children’s college expenses.
The report also analyzed data on senior-related housing, based on the purchasing patterns of 14 percent of buyers over 50 and 19 percent for older boomers.
Online searches were the starting point for all purchasers, with an even split between the use of mobile devices and a desktop/laptop. Older baby boomer homebuyers turned to real estate agents earlier in their search and favored conducting their research on a larger computer.
The NAR report is based on results of a survey mailed by NAR in July 2021 to almost 130,000 homebuyers, which resulted in 5,795 responses. The survey contained 129 questions about the purchase process of a primary residence home during the time period of July 2020 to June 2021. The survey response rate was an adjusted 4.5 percent.
Click on the link for a full copy of the NAR report, “Home Buyers and Sellers Generational Trends Report.”
Implications for Baby Boomer Marketing in 2022
Reverse mortgages will continue to grow in importance as the boomer market increases. All baby boomers will be 65 by the year 2029, placing this cohort of approximately 73 million older Americans well into the age range of 62 needed to qualify for a Home Equity Conversion Mortgage (HECM).
The combination of rising interest rates and an aging homebuyer population favors reverse mortgage marketing for mortgage brokers and loan officers who want to expand from traditional forward mortgages. For the mortgage brokers who are themselves baby boomers, the reverse mortgage market offers an ability to expand naturally into their own age group.
Aging in place remains a high priority for many boomers, despite this flurry of home purchases and sales. Baby boomers who aren’t moving are likely to be planning on home improvements, like a bathroom or kitchen renovation, to create a safe environment for the aging process.
Marketing to Baby Boomers
Digital marketing is an increasingly important way to reach baby boomer homebuyers and sellers, who gained online skills during COVID. Permissioned email marketing combined with digital advertising can be a powerful marketing campaign for targeted lead generation.
Other baby boomer marketing techniques include direct mail, social media platforms like Facebook and LinkedIn, and blogs. A “call to action” campaign that encourages consumers to respond to an offer of a free educational e-book or a complimentary telephone consultation.
Baby boomers respond to different campaigns at different times, so an integrated marketing approach is best. The more lead sources you have, the better your results will be. Before you start a serious lead generation campaign, you will want to review your website to make sure that your online forms are working correctly, that all links are functional, and that you can track website traffic to evaluate your results. Remember, never stop marketing!
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Baby Boomer Marketing Services
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