How Iowa’s Baby Boomers are Changing Housing Patterns

Iowa’s baby boomers (born 1946-1964) made significant housing decisions between 2018-2023 that shaped local real estate markets. 

Unlike coastal states, Iowa maintained stable housing affordability while still experiencing inventory shortages as 94.1% of residents 65+ stayed in place annually. When boomers did move, they primarily remained in-state, often transitioning to smaller homes or properties closer to healthcare facilities. The 2023 ranking of Iowa as the #1 retirement state, despite its climate challenges, underscores how financial factors increasingly outweigh traditional retirement considerations.

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Urban, Suburban, or Rural? – Where Iowa’s Boomers Are Moving (or Not)

Staying Put vs. Downsizing

A significant share of Iowa’s baby boomers are choosing to “age in place” rather than relocate. National surveys show about 75% of people 50+ want to remain in their homes or communities as they age. In Iowa, this is evident in the low mobility rate of older residents – 94.1% of Iowans 65+ did not move in a given year (2020–2021), much higher than younger age groups.

Many boomers have lived in their homes for years (on average 11 years for younger boomers and 16 years for older boomers before selling), and with many owning their homes outright or with low mortgage rates, there’s little financial incentive to move. This tendency to stay put has impacted housing turnover: Des Moines real estate observers note that boomers “aging in place” are limiting inventory and slowing home sales.

Downsizing Patterns

When Iowa boomers do move, downsizing is a common theme. Nationally, buyers over 57 are more likely to purchase a smaller home, often because their previous home was too large. In Iowa, real estate professionals have observed “a surge in home sales and downsizing” among retirees, as empty nesters list large family houses and seek out single-story or lower-maintenance homes.

Some boomers are opting for condos or townhomes that are easier to manage, or even renting luxury apartments to avoid maintenance altogether. That said, the downsizing wave has been gradual – many empty-nesters still occupy big family homes because they bought when housing was cheaper and see no urgent reason to sell.

In fact, baby boomers now own about 28% of all large (3+ bedroom) U.S. homes – double the share owned by millennials with kids – a stark change from a decade ago when younger families were equally likely to own large homes. This shift suggests that boomers holding onto spacious houses longer is a newer trend, enabled by financial comfort and preferences.

Urban vs. Rural Preferences

Iowa’s boomers exhibit mixed migration patterns when it comes to city versus country life. On one hand, many rural counties in Iowa are “graying” – small towns have high proportions of seniors as young people move out. Research from Iowa State University shows some rural communities support aging in place well: “smart senior towns” (towns ~2,000 people with amenities) keep older adults satisfied with local services, especially health care and shopping, more so than very small towns.

In these amenity-rich small towns, seniors can remain comfortably, whereas in more isolated rural areas some eventually relocate to be closer to doctors or family. Indeed, healthcare access is key: seniors nationwide are likeliest to choose neighborhoods convenient to medical facilities, and Iowa’s rural hospitals and clinics are unevenly distributed. This leads some rural Iowa boomers to move toward regional hubs or suburbs.

It’s noted that many Iowans have been moving from small towns to booming suburbs around Des Moines for better amenities – among them are older adults following their children or seeking convenience. In suburban Des Moines (like Waukee, Ankeny), new housing and healthcare options have attracted some retirees along with younger families.

Iowa’s affordability and open spaces can entice retirees to stay rural. Some boomers find their retirement income stretches further in the countryside with lower living costs, as long as they can manage the challenges (e.g., driving longer distances). There are even cases of urban Iowa boomers relocating to quieter rural areas or small Iowa towns for a slower pace and lower taxes, effectively “bucking” the typical Sunbelt migration in favor of staying in-state.

Overall, however, major out-of-state migration has been modest – Iowa does experience a net loss of retirees to warmer states, but not in droves. Between 2015 and 2019 Iowa had a slight net out-migration of residents 65+ (around 1-4% net loss), often to popular retiree destinations. Traditional retiree magnets still pull some Iowa boomers – Florida and Arizona see big inflows of Midwestern retirees – yet many others are content to remain in Iowa’s communities.

Regional Highlights – Des Moines vs. Smaller Cities

In the Des Moines metro, baby boomers make up a smaller share of homeowners (about 33%) than in Iowa’s more rural areas. This indicates Des Moines has a relatively younger homeowner base, likely due to job opportunities attracting Gen X and millennials. Boomers who do live in Des Moines are often staying in longtime homes in established neighborhoods.

Some have moved into downtown condos or townhouses for an urban lifestyle with walkable access to services, but this is a niche trend. More common is relocating near the suburbs (or staying there) to be close to adult children and grandchildren – a trend noted in which some older Iowans choose to live near where their kids have moved (often suburban areas).

In Iowa’s mid-sized cities (like Cedar Rapids, Davenport, Sioux City), boomers’ housing choices mirror the state-wide pattern: many aging in place in the homes they’ve owned for years, while others downsize to ranch homes or 55+ communities as health needs increase. These cities offer hospitals and conveniences that nearby rural residents might eventually seek. For example, an older farmer in a rural county might retire to a home in a nearby city or large town to be closer to medical care and shopping.

In sum, urban and suburban areas in Iowa have seen modest in-migration of older adults from the countryside, whereas the most remote rural areas face senior population declines over time as residents either pass away or move closer to services. The overall picture from 2018–2023 is one of relative stability – unlike some states that saw major retiree shifts, Iowa’s baby boomers largely stayed put, with incremental movement toward downsizing and toward service-rich communities when they moved at all.

Motivations Behind the Trends

Understanding why Iowa’s baby boomers make these housing choices requires looking at economic, policy, climate, and health factors.

Economic Factors – Affordability and Taxes

Financial considerations are paramount. Iowa’s cost of living and housing are generally affordable relative to national averages, which actually encourages many boomers to stay. In 2023, a Bankrate report even ranked Iowa as the #1 state for retirement, citing its reasonable home prices and cost of living as major draws.

A paid-off home in Iowa represents a low-cost place to live (aside from taxes and maintenance), and many boomers prefer to stick with that stability rather than face high prices elsewhere. By contrast, boomers in expensive regions might be pressured to sell and relocate, but in Iowa the financial pressure is lower.

That said, property taxes have been a notable concern. Iowa has one of the higher property tax rates in the country (9th-highest effective property tax rate as of 2022), which can pinch retirees on fixed incomes. For the average Iowa homeowner, taxes account for roughly 23% of monthly housing costs. This has motivated some to downsize to lower-valued homes or condos to reduce their tax burden, or to consider moving to counties with lower levies.

In 2023, Iowa lawmakers responded by capping local property tax growth and introducing a new $6,500 homestead exemption for seniors 65+ (phased in by 2027). This policy change directly addresses boomer homeowners’ concerns and may encourage more to remain homeowners in Iowa rather than selling due to taxes.

Aside from taxes, maintenance costs on large, aging homes play a role too. Older homeowners often find upkeep expensive or physically difficult, pushing them toward smaller homes or rentals. However, Iowa boomers who feel “house rich” (lots of equity) but “cash poor” have options like home equity loans or reverse mortgages to fund renovations or in-home care, which can enable them to stay put longer.

In short, if their Iowa home is affordable to keep, boomers tend to keep it, but if costs rise (taxes, utilities, repairs), downsizing becomes appealing.

Climate and Environmental Considerations

Traditionally, a warmer climate is a lure for Midwest retirees – the cliché of moving to Florida, Arizona, or Texas for sunshine applies to some Iowa boomers. Harsh Iowa winters (with snow and ice) are difficult for older adults, and indeed states like Florida and Arizona (with milder winters) consistently show high net in-migration of retirees. Some Iowa boomers do make this move or become “snowbirds” splitting time between Iowa and a Sunbelt state.

However, climate isn’t an overriding factor for all: the fact that Iowa ranks so highly as a retirement haven suggests many are willing to tolerate the winter in exchange for family, community, and cost benefits. Additionally, recent climate concerns have a flip side – extreme heat, hurricanes, and wildfires in other regions can make Iowa’s climate seem comparatively stable.

Iowa doesn’t have hurricanes or coastal issues, and while it has tornadoes and the occasional flood or derecho windstorm (as in 2020), these risks are somewhat localized. A boomer concerned about coastal climate risks might actually stay in Iowa or move back from, say, Florida’s hurricane zones.

Within Iowa, environmental factors like floodplain location or storm shelter availability influence some micro-decisions – e.g., an older couple might sell a riverfront house that’s seen repeat flooding, or they might prefer a newer home built with a safe room for tornado season. Overall, climate considerations cut both ways: Iowa’s cold winters push some boomers to leave or at least fantasize about Phoenix, but Iowa’s freedom from coastal disasters and its recent recognition as a safe, affordable haven keep many retirees planting their feet.

Health and Family Reasons

Health is a major driver of boomer moves. As this generation hits their late 60s and 70s in large numbers, access to healthcare and suitable housing becomes critical. Those who remain in rural or multi-story homes often cite health as the reason if they eventually move – either proactive (wanting one-level living, closer proximity to doctors) or reactive (due to a medical event).

Nationally, older buyers were far more likely to choose homes based on convenience to health facilities, and Iowa is no exception. We see many retirees relocating to be nearer one of Iowa’s regional medical centers (e.g., moving from a farm into Des Moines, Iowa City, or Sioux City to have a hospital nearby).

Additionally, family ties strongly motivate moves. Boomers are commonly moving “to be closer to friends or family” – for instance, if adult children have settled in Omaha or Minneapolis, some Iowa parents will relocate or at least consider it. Conversely, those with deep roots and family still in Iowa often stay for that very reason.

The pandemic underscored this: many boomers hunkered down in their Iowa homes in 2020–21 but also reevaluated priorities, with some opting to move nearer to family afterwards. Health also influences the type of housing: boomers experiencing mobility issues look for accessible homes (single-floor layouts, wider doorways).

There’s rising demand in Iowa for homes with senior-friendly features – and for senior living communities. The “silver tsunami” of boomers has led to more independent living and assisted living units being built in Iowa. Some who initially resist moving later transition into these as health needs require.

Lastly, a portion of Iowa boomers have decided to rent rather than own in retirement for health and lifestyle flexibility. By renting, they can more easily relocate for care or move in with family if needed, and they offload the burdens of home maintenance.

Financing Trends (2018–2023): How Iowa Boomers Buy Homes

The period 2018–2023 saw dramatic shifts in the housing finance landscape, and baby boomers in Iowa responded in distinctive ways.

Rising Mortgage Rates and Cash Purchases

After a decade of low interest rates, the early 2020s brought sharp increases. The 30-year fixed mortgage rate jumped from around 3% in 2020 to 6–7% by 2022–2023. High rates tend to deter borrowing, and boomers, who often have substantial equity, found a way around them: pay cash.

Nationwide, all-cash home purchases hit their highest level since 2014, and boomers led the charge. In 2023, 51% of Older Boomers (68–76) and 32% of Younger Boomers (58–67) bought homes without a mortgage, a huge jump from just a year prior.

This trend is likely present in Iowa as well, if not stronger, because Iowa’s median home prices are relatively low (around $210,000), making cash purchases feasible after selling a previous home. Boomers with paid-off homes could sell a $300k house in Illinois or even within Iowa and buy a $200k Iowa home outright – a scenario increasingly common.

The ability to outbid others with cash has in fact helped boomers nationally “win” many bidding wars against younger buyers. Iowa Realtors reported that in the frenzied 2021 market, buyers (especially older ones) often made cash offers to beat competitors and avoid interest costs.

As a result, a notable share of Iowa home sales in 2022–2023 were cash transactions. This is a big change from the 2008–2018 decade, when interest rates were lower and there was less incentive to tie up cash – back then, the majority of boomers still took mortgages when moving. Now, boomers are leveraging their accumulated housing wealth directly.

Home Equity Utilization

Iowa’s boomers have been judicious with home equity. Many entered retirement with significant equity after years of home price appreciation (U.S. home values climbed notably in the 2010s and spiked during 2020–2022).

For those who wanted to renovate or retrofit their homes for aging (think wheelchair ramps, bathroom grab bars, etc.), home equity lines of credit (HELOCs) offered low-interest funding during the late 2010s. Others used equity to help their children or to invest in a second property (some boomers bought winter condos down south while keeping an Iowa home).

There’s also the option of reverse mortgages; while exact Iowa usage stats are hard to find, it’s likely that a subset of Iowa seniors turned to HECM (Home Equity Conversion Mortgages) to draw income from their home’s value without moving. However, given Iowa’s conservative financial culture, many preferred to leave equity untapped unless necessary.

Instead, the dominant use of equity has been as a bridge to the next home: Boomers selling a long-time house in this hot market could use the hefty proceeds as a down payment (or full payment) on their retirement residence. According to NAR, older buyers overwhelmingly fund their home purchases through proceeds from their previous home sale – effectively rolling equity from one home to another rather than taking on large new loans.

Comparing 2008–2018 vs. 2018–2023

Over the last 15 years, the housing behavior of Iowa’s baby boomers has evolved. The late 2000s and early 2010s (2008–2013) were marked by the housing crash and Great Recession, which hit just as many early boomers were reaching their 60s. In Iowa, home values didn’t plummet as severely as in some states, but the downturn still caused hesitancy.

Fewer boomers moved or sold during the recession years – some who wanted to downsize couldn’t find buyers at acceptable prices, and others saw their savings shrink, leading them to postpone retirement and any relocation plans. Indeed, the homeownership rate among 55+ Americans actually rose through that period as they stayed put, while homeownership for younger groups fell.

In 2008, Americans 55+ owned 44% of owner-occupied homes; by 2018 that share was around 53%. This growing dominance of boomer homeowners was a trend that defined 2008–2018.

During that decade, many Iowa boomers were in a “hold” pattern – holding onto larger family homes longer than previous generations might have. By the mid-2010s, economic recovery and rising home equity opened a window for some delayed moves. We started to see more downsizing around 2015–2018 as home prices recovered and boomers felt more financially secure.

By contrast, the 2018–2023 period flipped the script: boomers became the largest home-buying group, primarily focused on rightsizing or relocating for retirement, and they increasingly used cash rather than credit. One striking difference is in market power – in the late 2010s, millennials were emerging as the top buyers, but by the early 2020s, boomers overtook millennials, comprising 39% of home buyers in 2022, a jump from just 29% the year before.

Key Differences Between Periods

Market Conditions: 2008–2012 was a buyer’s market (harder for boomers to sell, so they stayed put), whereas 2018–2021 became a seller’s market (easy to sell at high prices, prompting more boomers to list long-held homes). By 2022–2023, high rates created a mixed situation: boomers with equity advantage could buy, but others felt “locked in” by their low-rate mortgages.

Downsizing Timing: In 2008–2018, downsizing was more of a trickle – many boomers were in their 50s and early 60s (often still working) and delayed downsizing. Those who retired in that span often did moderate downsizes or moved to warmer climates if they could. In 2018–2023, boomers are older (60s/70s) and more are fully retiring, so downsizing and moving closer to family has accelerated.

Financing Habits: In the 2008–2018 period, boomers were more likely to carry mortgages into retirement or take on small new mortgages, thanks to low interest rates. Refinancing was common to lower payments, but cash-buying was less common. By 2020s, boomers became notably more conservative with debt, preferring to use cash/equity. The data shows a huge swing in one generation’s behavior: only ~22% of younger boomers paid cash for homes in 2022, but 32% did in 2023 – such jumps were not observed a decade ago.

Migration Patterns: From 2008 to 2018, Iowa’s population of older adults grew slowly and their migration was modest – some early boomers did relocate after the recession eased. Net migration of 65+ for Iowa was slightly negative then as now, with Sunbelt moves balanced by some staying. One difference is pre-retirees (50s) in 2008–2018 often moved for jobs, whereas 2018–2023 moves are more often retirement-oriented (amenities, family).

Regional Variations and Notable Local Trends

While statewide trends tell the big picture, interesting regional nuances emerge across Iowa.

Des Moines Metro

The Des Moines-West Des Moines area has been a growth engine, attracting residents of all ages. For boomers, Des Moines offers top healthcare (e.g., Mercy and UnityPoint hospitals), cultural attractions, and the state’s largest inventory of condos and 55+ communities.

However, boomers form a relatively smaller slice of homeowners here (~33%) compared to elsewhere in Iowa, indicating that many Des Moines boomers may have already downsized or even shifted to renting. The suburbs like West Des Moines, Ankeny, and Waukee are popular not just with young families but also with “empty nest” boomers who enjoy suburban conveniences.

There’s a trend of retirees moving into upscale townhomes in these suburbs – allowing proximity to golf, shopping, and grandkids. Des Moines’ downtown has seen some empty nesters move into modern lofts, but overall, suburban living remains more popular for older Iowans than urban condo living, given Iowa’s suburban housing is still quite affordable and spacious.

Eastern Iowa (Cedar Rapids/Iowa City/Dubuque)

Eastern Iowa has a sizable boomer population aging in place. Cedar Rapids saw many older homeowners rebuild or repair after the 2008 floods – some used that event as an impetus to move to newer housing on higher ground, while others returned and stayed put. The city and its suburbs offer many ranch-style homes that appeal to retirees.

Iowa City, with its world-class University of Iowa Hospitals, often draws retirees in need of specialty healthcare – some rural Iowa boomers relocate to Iowa City or Coralville specifically for medical convenience or a vibrant “college town” environment. Dubuque has actively marketed itself as a retirement-friendly city on the Mississippi, combining scenic beauty with low costs.

Notably, Iowa City was ranked the nation’s most livable small city for seniors by some indices in the 2010s, due to its health resources and walkability. Regional differences in property taxes also play in – for example, property tax rates in Iowa City and Des Moines are higher than in some rural counties, which might discourage some intra-state moves. Yet many boomers accept a slightly higher tax if it means being closer to hospitals or family.

Rural Iowa

Rural areas present a mixed story. Some retirees remain on farms or acreages well into old age, valuing their independence and open space. Iowa’s agricultural tradition means a fair number of boomers are literally still living where they grew up – though they may rent out the tilled acres, they keep the farmhouse.

The viability of rural living for seniors depends on access to basics. In counties with declining services (no nearby grocery or clinic), it’s harder for an 80-year-old to stay, whereas in “smart senior” small towns that offer clinics, pharmacies, groceries, and social opportunities, seniors thrive longer in place.

The Iowa State study identified dozens of such supportive communities scattered around Iowa – these towns (e.g., Spencer, Pella, Decorah, Fairfield, etc.) often become informal regional retirement hubs, attracting farm folks from the surrounding countryside when they decide to move to town.

One positive development for rural seniors is the expansion of telehealth and delivery services in recent years, which is helping some stay longer by getting medical consults or groceries delivered to their door. Community initiatives like local volunteer driver programs (to take seniors to appointments) have also sprung up.

References

• The State of Indiana’s Housing Market 2020 – Indiana University Kelley School of Business.
• Empty Nesters Own Twice As Many Large Homes As Millennials With Kids – Redfin News.
• Redfin Survey: More Than Three-Quarters of Baby Boomers Plan to Stay In Their Home as They Grow Older – Press Release, April 2, 2024.
• Baby Boomers Overtake Millennials as Largest Generation of Home Buyers – NAR Newsroom, Mar. 28, 2023.
• Baby Boomer-Dominant Housing Markets – Research report analyzing U.S. Census data.
• We’re Good Here: Boomers Are Staying Put Instead of Downsizing – Trulia Research Blog.
• Back to the City: Re-urbanization Movement Brings Opportunities – REJournals (Minnesota Real Estate Journal).
• The Cheapest Places to Retire in the US – Kiplinger Personal Finance.
• Demographic Turning Points for the United States: Population Projections for 2020 to 2060 – U.S. Census Bureau
• 2023 Home Buyers and Sellers Generational Trends Report – National Association of REALTORS®
• Population Aging and Migration Patterns – U.S. Census Bureau