Even as housing market activity in Virginia rebounds from COVID-19, a lack of inventory remains a constraint. Buyers who are returning to the market are finding very few listings in most local markets. One driver of the low inventory levels is the greater share of older homeowners in Virginia who are remaining in their homes longer rather than listing them for sale.
According to data from the U.S. Census Bureau, there are more than 2 million homeowners in Virginia, including more than 600,000 homeowners where the household head is age 65 or older (a “senior homeowner.”) Compared to other age groups, Virginians age 65 are much more likely to be homeowners. The homeownership rate among the 65+ population is 81%, compared to 61% among adults under age 65. Nearly 60% of senior homeowners own their home free and clear—that is, without a mortgage.
Seniors comprise relatively high shares of homeowners in the Bristol, Charlottesville and Staunton metropolitan areas, as well as counties outside of metro areas. By contrast, in the Northern Virginia metropolitan area, a somewhat lower share of homeowners are seniors.
Senior homeowners have been remaining in their homes longer. More than three out of five senior homeowners have lived in their homes for 20 years or longer. More than 40% have been in their homes for 30 years or longer. Less than nine percent have moved in the past five years.
The vast majority of senior homeowners live in single-family homes. More than 80% of senior homeowners live in single-family detached homes, and about 8% live in a townhome. Less than 2% live in a large building (e.g. condominium) with 50 or more units.
Many senior homeowners live in homes that they moved into when they were younger and had children living at home. Therefore, there is a significant number of senior homeowners in Virginia that live in homes where they feel like they have more space than they need. Some seniors may increasingly feel like the upkeep of a large single-family home with a yard is more than they can handle.
According to the Census Bureau data, there are nearly 220,000 senior homeowners who live by themselves. Among those, 71%—or more than 150,000 homeowners—live in a home that has three or more bedrooms. There are an estimated 312,000 senior couple homeowners. More than 35%—or nearly 110,000 of these homeowners—live in a home with four or more bedrooms.
Many senior homeowners are staying in their homes, even when they might want to downsize, because there are relatively few options available. The number of new homes being built in Virginia is still far below what is needed to keep up with demand. When seniors can find options, they are often unaffordable or would involve spending more money on a smaller home.
The limited number of homes for sale is going to continue to be a constraint on Virginia’s housing market in the near-term. An increase in the pace of new construction will help, but the demographics of the state’s homeowners and the increasing demand among younger people suggests that the demand-supply imbalance could persist for years. REALTORS® can help prospective homebuyers be as prepared as possible to act when they find a home that meets their needs.