Americans increasingly prefer larger homes as they age

Many American baby boomers are using accumulated wealth to acquire larger homes in retirement, defying the traditional notion that they should downsize to save money.

A growing trend among affluent older Americans sees them purchasing larger properties or expanding their current residences instead of downsizing after retirement to reduce costs. These homes often feature spacious kitchens, guest rooms for children and grandchildren, ground-floor master bedrooms, and grab bars in bathrooms. Homeowners desire space for gatherings while also ensuring they can age in place comfortably. This trend reverses the traditional idea that retirees should sell larger homes to move into smaller ones, thereby reducing maintenance costs and freeing up some accumulated assets.

Angela and Victor Martino, along with their two daughters, once lived in a single-story home less than 186 square meters in Denair, California. After their daughters grew up and moved out, the couple purchased a house of about 465 square meters, three times larger, right next door. After one year of renovations, their new home features a spacious kitchen with enough room for a specialized meat slicer Victor uses during family gatherings. A recreation room for their seven grandchildren boasts polished concrete floors to minimize damage. The master bathroom's specially designed bathtub makes it easier for the couple to enter and exit as they age. Victor stated he has no intention of moving to a smaller home, as he and his wife frequently host Thanksgiving, Christmas, birthday celebrations, and welcome their grandchildren for overnight stays when their parents are away.

A for-sale sign stands in front of a house in Encinitas, California, on 25/7/2025. *Reuters*.

The Covid-19 pandemic has reshaped how many view their homes. Lockdown periods emphasized the importance of gatherings, while remote work allows adult children to visit more frequently and stay longer. This trend of older adults retaining or continuing to purchase larger homes occurs as the US faces a shortage of about 4,03 million homes in 2025. While many young families struggle to find spacious homes, baby boomer homeowners have less incentive to sell. Beyond the desire for family proximity, taxes and housing supply also deter older adults from selling their homes. Some do not wish to incur significant capital gains taxes when selling properties that have appreciated substantially over many years. In this context, many older individuals choose to stay or purchase larger homes, adding features like ground-floor bedrooms, grab bars, and private spaces for different generations.

Ed and Mary Smith once lived about a 5-hour drive from their three children in the Boston area. In 2022, they moved from suburban New Jersey to Falmouth, Massachusetts, purchasing a home around 372 square meters, about 46 square meters larger than their previous residence. The proceeds from selling their New Jersey home and a summer house in Falmouth covered the nearly two million USD price tag. The master bedroom is located on the first floor, with the second floor reserved for their three children and six grandchildren during visits.

Approximately 7% of homebuyers aged 61-70 cited the need for more space as their primary reason for choosing a new home, an increase from 4% in 2016, according to the National Association of Realtors (NAR). While the proportion of smaller home purchases remains slightly higher, the group opting for larger homes is growing rapidly. Baby boomers, defined as those born between 1946 and 1964, currently represent the largest share of homebuyers in the US. They account for about 42% of homebuyers, more than any other generation. A key advantage for baby boomers is their ability to pay with cash. According to NAR, about 50% of late-generation baby boomer buyers and approximately 40% of younger baby boomers typically pay entirely with cash, without needing a mortgage. The median home value in the US increased by about 45% in the five years leading up to 2/2025, allowing many long-term homeowners to accumulate significant equity for their next property purchase. Financial advisor April Tardiff at Merrill Lynch, a brokerage and wealth management firm, stated that all eight of her retired clients this year moved to larger homes, whereas only one client chose to downsize over the past five years.