So Much for Home Downsizing?

A recent study by Bank of America Merrill Lynch found that nearly one-third of Baby Boomers and seniors are buying larger homes in retirement instead of downsizing.

The report seems to point to an interest in larger home specifically that have extra bedrooms. One-third of retirees surveyed say a top reason they wanted to upsize was to have a home large enough for family members to visit. When adult children, grandchildren, and other family members are scattered around the country, the homes of retirees tend to function as a meeting place for extended family functions.

Some retirees may be looking for something more than just a guest bedroom, however. The multigenerational household trend is evident in the study, with one in six (16 percent) retirees saying they have a “boomerang” adult child who has moved back in.

Only 51 percent of those surveyed actually did downsize, citing greater financial freedom (64 percent) and lowered maintenance duties (44 percent) among their top reasons for doing so. The remaining 19 percent moved to a similarly-sized home.

Source: “Retiree preferences are poised to drive the housing market, study says,” L.A. Times (Feb. 25, 2015)