Big Builders Starting To Bank On Boomers

For the first time in U.S. history, older Americans will outnumber children by 2035, according to the U.S. Census Bureau, and already hold nearly two-thirds of the home equity in the U.S., which amounts to $8 trillion.

With boomers making up such a large portion of the population, it only makes sense that home builders are expanding the definition of what targeting this demographic means.

For firms that are targeting more traditional age-restricted communities, there can be benefits beyond just tapping into the bulging boomer generation with its outsized share of America’s home equity. Since age-restricted active adult communities don’t typically put the same burdens on local schools and roadways—guidelines of the Housing for Older Persons Act prohibit anyone under 19 from living in the house, and retirees don’t usually add more cars to the road during rush hour—municipalities are often more welcoming to them than typical developments.

Not only is that a stark contrast to the entitlement battles builders have bemoaned in recent years, but it also can have meaningful impact on the price of a house at the lower end of the market. It can be the difference of $30,000 or more, all in, a facet that’s particularly important to retirees on a fixed income, regardless of whether they have equity from another home.

The upfront costs, however, for active adult can be as much as 10 times more than those for a conventional community, because buyers want amenities in place the day they move in, not at some point down the road.