Need to Buy a Larger Home to Fit Your Family? Here's Why That May Be a Problem

It would probably be an understatement to call today's housing market challenging for would-be buyers. Not only are mortgages expensive to sign, but housing inventory is sorely lacking. All told, not a great combination.

You may be having an exceptionally hard time finding a home if you need a larger one to accommodate your family. Again, that could be a function of limited inventory in general. But there's another reason why you might struggle to find a larger home today.

Older homeowners are staying put

It was once a pretty common thing for older homeowners to downsize once their kids grew up and moved out. But data from Redfin finds that baby boomers who are empty-nesters own 28.2% of large homes (homes with three bedrooms or more) in the U.S.

By contrast, millennials with kids only own 14.2% of the country's large homes. And if baby boomers refuse to leave their homes, it's only going to be that much more challenging for younger buyers to find properties that meet their families' needs.

Why aren't boomers budging?

There are a few reasons why older homeowners with empty nests may be opting to stay put rather than move. For one thing, it's not necessarily a great time to downsize.

As mentioned earlier, mortgage rates are expensive. And it's not a given that every older homeowner will be able to sell their property and buy a replacement home outright in cash. As such, boomers who know they'll need to finance their next home purchase may be looking to avoid that situation due to the high cost of borrowing today.

Also, just as limited housing inventory may be making it more difficult to find a larger home, some older homeowners might be struggling to find the ideal smaller home. And why would anyone want to move to a home that doesn't fully meet their needs at that stage of life?

There's also the exorbitant cost of long-term care to think about. Many older Americans would probably rather age in place than spring for an assisted living facility -- something whose median annual price tag last year was $64,200, according to Genworth. To put it another way, it could prove to be a lot less expensive to retrofit an existing home to accommodate aging than pay for something like assisted living for years.

How to find a larger home when there aren't many available

If you have a larger family, you may not be willing to compromise on square footage. And frankly, you shouldn't, as that could lead to uncomfortable living quarters for many years.

Instead, you may want to be open to different neighborhoods. The more you're willing to broaden your search parameters, the greater your chances of finding a suitable home.

Similarly, don't say no to larger homes that need work. You may be able to convert a dingy, unfinished basement to a nice amount of usable space that allows your family to spread out.

Finally, don't write off the idea of buying a smaller home on a larger lot and putting on an addition. Of course, this has the potential to be a costly and complicated project. But it may be a solution if you're struggling to find a home that's large enough to meet your needs within your price range.

Let's say your home-buying budget maxes out at $500,000, and you can't find a larger home within that threshold. What you could possibly do instead is buy a $300,000 home and then spend $200,000 on an addition you finance.

All told, it's easy to see why older Americans aren't so quick to give up their larger homes. As mortgage rates fall, we could see more movement in that regard. But for now, you may need to get creative and flexible if you're looking to buy a home that's generous in size.