Boomers aren't following the expected script when it comes to downsizing.
Some are selling large family homes while others are choosing to modify and stay put – creating unexpected ripples across the housing market.
Why it matters: This generation controls trillions in real estate wealth, and their housing choices directly impact inventory and pricing for all buyers – especially first-time homeowners competing for smaller properties.
The downsizing reality check
The mass migration of older homeowners to smaller homes isn't happening exactly as predicted.
Today's higher mortgage rates make many reluctant to give up the rock-bottom refinanced rates they secured in recent years.
"Many Boomers are skipping the downsizing phase and adapting instead," said Michael McDougald, owner of StairHandrail.com. "They may want to, but their homes are paid off or carrying ultra-low interest rates. That's a huge psychological and financial anchor."
By the numbers
McDougald says over one-third of stair handrail orders come from aging homeowners modifying their homes, rather than moving.
McDougald estimates demand for stair railings in existing homes grew 28% over the past two years, driven largely by the 55+ segment.
Only about 25% of Boomers who planned to downsize actually have, according to Andrew Lokenauth, financial expert and founder at TheFinanceNewsletter.com.
Push and pull factors
Those who do downsize are driven by:
1. Financial Pressure: As housing value continues to rise, the increasing property tax has hit fixed-income retirees particularly hard.
"The rising cost of utilities and property taxes are a strong incentive to make the move now," said Anna Novak, downsizing specialist at Simply Downsized in Arlington, VA.
"I've seen several clients hit with 15-20% tax increases, which is brutal on a fixed income," said Lokenauth.
2. Emotional Readiness: “A lot of people are loosening their emotional ties to their 'stuff' and giving themselves permission to let go of the family home,” Novak said.
3. Health Considerations: Multi-level homes present serious fall risks, and proximity to hospitals and medical facilities can become problematic as mobility decreases.
What they want
When they do move, this generation has specific preferences that are reshaping housing demand.
1. Maintenance-free living options that offer security and convenience.
“Most of my clients who make a planned downsizing move are looking forward to the freedom to leave town as they wish, and to say goodbye to the cleaning and maintenance headaches of a large home and property,” Novak said.
2. Single-level living. Smaller yards with professional landscaping services appeal to those tired of maintenance headaches.
3. Condominiums in walkable areas and gated communities. "Townhouses are generally out, even if they have elevators, because of the hassle of moving around and the relatively small room size," Novak said.
Market impact
The aging homeowner effect creates both challenges and opportunities across the housing spectrum.
In popular retirement destinations, the influx of cash-rich downsizers drives up prices for smaller homes and condos as they compete for limited inventory.
Supply mismatch: "There's maybe 50% of the inventory of single-level homes needed to meet this demand," Lokenauth said.
What's next?
The generational housing shift is just beginning and will continue for years as millions of homeowners reassess their housing needs.
Boomers have shown that they are comfortable staying put, with most choosing to modify existing homes rather than sell. Those who do move often seek single-level, single-family homes with manageable yards and proximity to amenities – properties that are increasingly scarce in many markets.
This behavior creates both challenges and opportunities for younger homebuyers. For those competing with downsizing empty nesters, market experts suggest:
Look slightly outside walkable areas where competition drops significantly
Consider properties needing minor updates, as older buyers typically want move-in ready homes
Offer flexible terms like extended closings or rent-back options that cash buyers may not
Will this housing trend accelerate? "We fully expect this trend to continue at least through 2035, when the last of the Boomers turn 70," Novak said.
