Aging in Place Harms Millennial Home Buyers, Says New Video and Report – MHVille Opportunity or Obstacle?

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CNBC and Freddie Mac have released new information that claims that more seniors “aging in place” – not downsizing or selling their homes – is complicating the housing market for millennials and other buyers.

CNBC said, “As more older Americans ‘age in place,’ millennials struggle to find homes,” was Diana Olick’s headline, here were her top line bullets yesterday.

  • With more seniors than ever aging in place and choosing not to sell the family home, an estimated 1.6 million fewer properties are now available in a market already experiencing a critical shortage, according to Freddie Mac.
  • That is about the same number of new single-family and multifamily housing units built each year.
  • That stay-put trend is crashing into the rising demand for housing from the huge millennial generation: fewer homes for sale will continue to put upward pressure on already overheated home prices.
  • There’s a stalemate,” said Jane Fairweather, a longtime real estate agent in Bethesda, Maryland. “We can’t get enough housing for the couples who want to put their kids in good public school systems.”

Question – Follow the Facts and Evidence – Compare and Contrast

Freddie Mac’s estimate for the housing shortage is much smaller than the estimates from the National Low Income Housing Coalition (NLIHC) and the National Association of Realtors (NAR) chief economist, Lawrence Yun, Ph.D. NLIHC said that there is a 7.2 million unit shortage in their “GAP” report, while NAR’s Yun said that some 8.3 million units are needed.

 

 

By contrast, “We believe the additional demand for homeownership from seniors aging in place will increase the relative price of owning versus renting, making renting more attractive to younger generations,” said Sam Khater, chief economist at Freddie Mac, which CNBC’s report said estimated the current market needs about 2.5 million more homes to meet demand.

That means that NLIHC and NAR see it quite differently than Freddie Mac on this issue.

But Olick’s report – linked here – noted that 64 year old Louis Tenenbaum, a housing advocate in Kensington, Maryland – who himself is preparing to age-in-place – cited data from Harvard’s Joint Center for Housing Studies (JCHS) on the topic. Tenenbaum said that 63 percent of the estimated $383 billion spent on remodeling each year is among people over 50 years of age, per the JCHS.

That remodeling figure should once more give manufactured housing professionals pause. Imagine, $383 billion spent on remodeling alone in 2018. That dwarfs the estimated $7.62 billion total spent on all new manufactured housing in 2018.

Or another way to consider this is that the $1,664,587,000,000 spent on new and existing conventional housing in 2018, plus the $383 billion the JCHS states was spent on remodeling, mean the combined spending on construction and remodeling exceeds $2 trillion a year in the U.S.

More specifically, the estimated total is $2,047,587,000,000.

Manufactured housing professionals, investors and affordable housing advocates, this is one more wake up call.

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Thousands of professionals are taking the path of least resistance, day-by-day.  But the same old, same old, yields the same old results.

Many are advertising for and getting ‘the mobile home buyer,’ and many of those – after decades of ‘easy financing ads’ are of the belief that financing on a new manufactured home is easy. Not so. Which explains the scores of turn-downs and many loans that don’t close because the down payment required was too much for a potential buyer to raise.

By contrast, the approval rates on conventional housing is reportedly higher, in part because the prospects are better qualified in the first place.

As a plug, keep in mind that MHProNews’ consultant, L. A. ‘Tony’ Kovach has developed proven marketing and sales processes that attract and convert well qualified shoppers who consider a conventional home into buyers of manufactured homes. For more on business development services, click here.

To learn more about the factors holding manufactured housing back from its true potential, see the related reports, below the byline and notices that follow. That’s this morning’s “News through the lens of manufactured homes, and factory-built housing” © where “We Provide, You Decide.” © ## (News, analysis, and commentary.)

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