Redfin Reports Older Americans Are More Likely to Buy Disaster-Prone Homes Than Younger Americans

Rhea-AI Summary

Redfin (NASDAQ: RDFN) reports that older Americans are more likely to purchase homes in climate-risk areas compared to younger buyers. The study reveals that 36.9% of home purchases by people aged 65+ were in counties with high extreme heat risk, versus 32.3% for buyers under 35. Similar patterns emerge for flood risk (13.3% vs 9.8%) and fire risk (3.7% vs 2.6%).

This trend is attributed to popular retirement destinations like Florida and Arizona, which face significant climate risks but offer attractive benefits such as no retirement income tax. The analysis also shows that in counties where 65+ buyers are most active, 96.2% of homes face high heat risk, compared to 59.2% in areas preferred by younger buyers.

Insights

Market Research Analyst

This demographic analysis reveals significant insights about real estate purchasing patterns and climate risk exposure. The data shows a clear correlation between age and willingness to buy in climate-vulnerable areas, with 36.9% of 65+ buyers choosing high-heat risk areas compared to 32.3% for under-35 buyers. The findings highlight a potential future shift in property values and market dynamics in climate-vulnerable regions.

The trend suggests increasing insurance costs and climate-related expenses could significantly impact property valuations in popular retirement destinations like Florida and Arizona. As younger, more climate-conscious buyers potentially avoid these markets, it could create long-term pricing pressure in these regions. This generational divide in climate risk consideration could reshape real estate market dynamics over the next few decades.

Insurance Risk Analyst

The growing disparity in insurance costs between climate-safe and climate-vulnerable areas presents a significant financial consideration. In Florida, the combination of rising insurance premiums, HOA fees and property taxes is already affecting affordability. This trend could accelerate as climate risks intensify, potentially creating insurance availability issues in high-risk zones.

The report's findings about buyers' increasing focus on insurance rates during property negotiations signals a market shift. The practice of buyers requesting sellers' insurance broker information indicates growing sophistication in understanding total cost of ownership. This evolution in buyer behavior could lead to more pronounced price differentials between properties based on their climate risk exposure.

37% of home purchases made by people 65+ occur in counties with high risk of extreme heat, compared with 32% of purchases made by people under 35, and the same trend holds true for flood and fire risk

SEATTLE--(BUSINESS WIRE)-- (NASDAQ: RDFN) — Older Americans are more likely than younger Americans to buy homes in places with significant climate risk, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. Over one-third (36.9%) of home purchases made by people 65 and older last year were in counties with high risk of extreme heat, compared with less than one-third (32.3%) of home purchases made by people under 35.

The trend holds true for flood and fire risk; 13.3% of purchases made by people 65+ were in counties with high risk of flooding, compared with 9.8% of purchases by those under 35. And 3.7% of purchases made by people 65+ were in counties with high fire risk, compared with 2.6% of purchases by people under 35.

Share of home purchases, by age, made in counties at high risk of extreme heat, flood, and/or fire: 2023
	<35	35-44	45-54	55-64	65+
Extreme heat	32.3%	35.2%	36.8%	37.7%	36.9%
Flood	9.8%	10.7%	11.8%	13.4%	13.3%
Fire	2.6%	2.6%	2.9%	3.3%	3.7%
Two or more of the above	8.3%	9.1%	10.2%	11.8%	11.8%

There are a few reasons older Americans are more likely than younger Americans to buy homes in risky areas:

• Many of America’s retirement hotspots are risky for the same reason they’re desirable: They’re exposed to the hot sun and/or the coast. Think Arizona, which is prone to extreme heat and drought, and Florida, which is prone to hurricanes and rising sea levels. Florida is a top retirement destination in part because it doesn’t tax retirement income. But that benefit is beginning to be offset by a surge in insurance costs and HOA fees caused by intensifying natural disasters, along with soaring property taxes.
• Young Americans often gravitate toward major urban job centers—like Boston, Chicago and Minneapolis—many of which face lower climate risk than retirement hotspots in places like Florida and Arizona. Though it’s worth noting that remote work and the growth of Sun Belt metros has upended this dynamic somewhat.
• Older Americans are less likely than younger Americans to factor climate change into their decisions about where to live. Over half (56%) of millennials and exactly half (50%) of Gen Zers say climate change affects where they choose to live, compared with less than one-third (31%) of baby boomers, according to a recent survey commissioned by Redfin. That may be because younger people will have to deal with the consequences of climate change for longer, and because climate change is a major topic in young social circles.

“Retirees understand the risks of moving to Florida, but many believe the pros still outweigh the cons,” said Rafael Corrales, a Redfin Premier real estate agent in Miami. “When I explain to buyers that they can get more bang for their buck and lower flood risk a little further inland, they often tell me, ‘Rafael, we came to Florida for the waterfront views.’”

Corrales said that many homebuyers are now asking sellers how much they pay for insurance and, if it’s a good rate, requesting that the sellers pass along their insurance broker’s contact information. This gives buyers leverage when they’re negotiating with other insurers. Buyers are also considering how much they’ll have to pay for insurance when writing offers, he said.

Redfin broke the findings down by income level, and found that older people of all income levels—not just those who are affluent—are generally more likely to move to risky areas than younger people.

Nearly 100% of homes face high heat risk in places where buyers skew older, compared with 59% of homes where buyers skew younger

Nearly all homes (96.2%) face high heat risk in the counties where 65+ buyers took out the largest share of mortgages last year, on average. That compares 59.2% of homes in the counties where buyers under 35 took out the largest share of mortgages.

This trend also holds true for flood and fire risk. In the counties where 65+ buyers took out the largest share of mortgages, 24.6% of homes face high flood risk and 35.7% face high fire risk, on average. In the counties where buyers under 35 took out the largest share, 16% of homes face high flood risk and 19% face high fire risk.

These findings are based on a Redfin analysis of climate risk scores from First Street, and Home Mortgage Disclosure Act (HMDA) data covering mortgage originations for primary homes. Redfin defines a high-risk county as one that ranks in the top 10% when it comes to the share of homes facing high fire or flood risk, and the top 33% for heat risk. Climate risk scores are based on a property’s current risk as well as how that risk is expected to grow over the next 30 years.

To view the full report, including charts and methodology, please visit: https://www.redfin.com/news/climate-risk-by-generation/

About Redfin

Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, and title insurance services. We run the country's #1 real estate brokerage site. Our customers can save thousands in fees while working with a top agent. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we've saved customers more than $1.6 billion in commissions. We serve approximately 100 markets across the U.S. and Canada and employ over 4,000 people.

Redfin’s subsidiaries and affiliated brands include: Bay Equity Home Loans®, Rent.™, Apartment Guide®, Title Forward® and WalkScore®.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email press@redfin.com. To view Redfin's press center, click here.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241216499719/en/

Redfin Journalist Services:

Isabelle Novak

press@redfin.com

Source: Redfin

FAQ

What percentage of home purchases by seniors (65+) are in high heat risk areas according to Redfin (RDFN)?

According to Redfin's report, 36.9% of home purchases made by people 65 and older were in counties with high risk of extreme heat.

How does flood risk exposure differ between young and senior homebuyers for RDFN properties?

13.3% of purchases made by people 65+ were in counties with high flood risk, compared to 9.8% of purchases by those under 35.

What percentage of homes face high heat risk in areas where senior buyers are most active, according to RDFN?

In counties where 65+ buyers took out the largest share of mortgages, 96.2% of homes face high heat risk.

How do climate change considerations differ between generations when choosing where to live?

According to Redfin's survey, 56% of millennials and 50% of Gen Zers say climate change affects their living choices, compared to only 31% of baby boomers.