As Gen Xers inch toward retirement, they’re considering where to live

When they were raising their four children, Billy and Erin Shipley had space for their family to grow: a two- story, five-bedroom house in Sugar Land, Texas, with a large yard and a pool. But as the children became adults and moved out, the second floor was deserted and main- taining the lawn and pool became a burden.

Like many members of Generation X facing an empty nest, the Shipleys decided to look for a home better suited to their needs where they could eventu- ally live in retirement. They chose a three-bedroom, sin- gle-story house in Bridge- land, a planned community about 35 miles away. “I did not look at it as a temporary exercise,” said Erin Shipley, 46. “We could live here for- ever.”

Billy Shipley, 54, added that the single story was a draw. “It’s going to be great not having to walk up stairs later,” he said.

Gen X is typically defined as those born between 1965 and 1980. Its oldest mem- bers are several years away from retirement, but they are already starting to think about where they will live in their 70s, 80s and even 90s.

The desire to grow older in one’s own home — rather than having to move in with family or to a retirement home — is common among many generations. In 2021, 88% of older adults, defined as people at least 65 years old, lived in their own home, according to a report from the Harvard Joint Center for Housing Studies.

“Overall demand is for maintaining quality of life as you age,” said Joanna Frank, CEO and president of the Center for Active Design, a nonprofit organization that developed the Fitwel stan- dard used by architects, designers and developers to foster wellness at home and in the workplace.

But homebuilders say they are starting to see rising demand among Gen Xers for homes they can age into.

“We are at the cusp,” said David O’Reilly, CEO of How- ard Hughes Holdings, which builds planned communi- ties, including Bridgeland in Texas. Many Gen Xers still have children at home, he said, but they will soon be empty nesters. “That’s normally the tipping point,” he added.

Those who can afford it are willing to pay for extra space in case they need to take care of other family members, such as grand- children, adult children and aging parents — and in many cases, they already are. In new developments, they are seeking access to health and wellness amenities, such as hiking trails and tennis courts, as well as opting for home features such as show- ers instead of bathtubs, for instance, and asking for the latest gadgets to help them as they age.

“They have more market power than younger buyers,” said Jennifer Molinsky, direc- tor of the Housing an Aging Society Program at the Har- vard Joint Center for Hous- ing Studies. “They have a lot of wealth and are ready to make changes.”

With a median income of $126,900, members of Gen X are still amassing wealth, according to a report released Wednesday by the National Association of Realtors, or NAR, a trade group. “They are in their peak earning years,” said Jessica Lautz, the group’s deputy chief econo- mist and vice president for research.

They are also sitting on a pile of home equity. Home- ownership among Gen Xers was 72% in 2023, which was significantly higher than for millennials, at 55%, according to a report from Redfin, a real estate services company.

Another factor prompting Gen X to consider moving sooner to purchase a home for their retirement years is the crunch in the housing market, which was stuck in a deep freeze for most of 2023 as high interest rates kept many buyers and sellers on the sidelines. Home prices rose 6% in January from the same month a year ago, according to the CaseShiller home price index, and many potential buyers worry that prices will continue to soar, hampering their ability to afford a home later.

“If they are shopping for homes, given the tightness of the market and remote work, I do believe you see more Gen Xers seeing a home purchase as a home for the rest of their lives,” said Cristian deRitis, deputy chief economist at Moody’s Analytics.

They are not necessarily trading down in terms of space or quality, he added. In fact, some may be looking to trade up, especially if they are buying what will be their last home. “‘This is my 30-year home, not my fiveyear home,’” he said.