ORLANDO, Fla. – Call it a “Dream Home Detour.”
According to a 2024 housing analysis by Redfin, empty nest baby boomers own almost twice as many three-bedroom homes as millennials with children: 28.2% versus 14.2%. That imbalance is reshaping Central Florida’s housing market in ways that are frustrating buyers across generations.
Older homeowners often say they want to downsize but with mortgage rates hovering above 6% and the additional hit of a reset on property taxes on a new home, selling a longtime home and starting over can be costly. Those financial hurdles make many boomers pause when considering downsizing.
“They’re thinking, ‘I’m going to start all over again, get into another 30-year mortgage or 15-year,’ whatever the case may be,” said Lawrence Bellido, president of the Orlando Regional Realtor Association. “It may not fit in their plans because it’s so costly right now.”
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Many of the homes owned by older Americans are either paid off or have mortgages secured years ago at much lower rates. Replacing that with a new loan at today’s higher interest rates makes little sense to some.
“It’s kind of silly for them to just go ahead and let it go and then get into [a mortgage with] a much larger [interest rate],” Bellido said.
The result is what some describe as a housing traffic jam.
Bellido says as of late, it’s been a roadblock on opportunities for many first-time home buyers. For younger families, the slowdown makes the pursuit of the American dream more difficult. The squeeze is further compounded by another factor that reshaped the market during the pandemic: investors.
In recent years, cash buyers – often investors – have quickly snapped up homes, sometimes outbidding families who relied on traditional financing. Bellido recalled one example where a first-time buyer couldn’t reach a deal with a seller over replacing a roof.
“The contract fell apart and the cash investor came in and bought it for $10,000 more than what was offered,” he said. The investor added, “Don’t worry about the roof.”
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Bellido told News 6 that while investor activity has cooled somewhat, its impact on inventory remains clear.
So, where does that leave buyers today?
One alternative is that families are increasingly choosing multi-generational living, either bringing children back home after college or accommodating aging parents who need support.
“They may build out the garage, convert it into another bedroom, and have them just use the space or rent it out,” Bellido said.
He added that even some family members are now pooling resources.
“You have siblings purchasing together homes to make it affordable for them,” he said.
Another option gaining attention: buying a duplex.
“If you have a duplex that’s available, I would say jump on it because you could use one [side] for yourself and then rent out the other side,” Bellido said. He added: “And it could help offset the cost for the mortgage.”
Younger buyers are also reconsidering what they want from a neighborhood. Some are choosing homes further from work, preferring neighborhoods with fewer or no homeowners association restrictions.
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Bellido explained the reasoning for this shift: “Some HOAs are very strict on what you can and cannot do with your home… You just can’t uproot a tree, plant a garden right in the front yard or anything like that.” For many first-time buyers, the freedom to park company vehicles or store boats outweighs the appeal of manicured landscaping.
Despite the recent challenges of high interest rates, low inventory, and increasing restrictions put in place by some (not all) HOAs, the market is starting to loosen.
Going forward, Bellido sees reason for optimism.
“There’s a larger selection of inventory,” he told News 6. “We’re at about five and a half months of inventory – at six months we consider [that] a balanced market. Anything above that would be a complete buyer’s market.”
Bellido says buyers are increasingly able to negotiate closing costs or have sellers replace aging air conditioners, water heaters or roofs, something that was rare in the past few years when competition was fierce.