The Kentucky housing market has undergone significant transformations in recent years, with baby boomers emerging as unexpected power players. Born between 1946 and 1964, this generation has defied traditional retirement expectations, reshaping residential landscapes across the Commonwealth. While analysts once predicted a “Silver Tsunami” of boomers flooding the market with their family homes, the reality has proven far more nuanced.
From Louisville’s urban condos to rural farmhouses in Eastern Kentucky, boomers are making strategic moves based on lifestyle preferences, financial considerations, and family connections. Their decisions are directly impacting housing availability for younger generations while simultaneously creating new opportunities in certain market segments.
Statewide Trends in Baby Boomer Home Buying (2018–2023)
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By 2022, baby boomers overtook millennials as the largest share of home buyers nationally, accounting for 39% of U.S. home purchases versus 28% by millennials. Unsurprisingly, Kentucky mirrors this trend, given its relatively older population and high homeownership rates among seniors.
Over 81% of Kentuckians aged 65+ own their homes, slightly above the national average. Many boomers have built substantial equity after decades of homeownership, putting them in a strong position to buy homes even in a competitive market. This has enabled boomers to remain “big movers” in Kentucky real estate, often purchasing retirement “forever homes” or properties closer to family.
Aging in Place: The Dominant Trend
Despite their buying power, a significant portion of Kentucky’s boomers are staying put. Surveys indicate more than three-quarters of older homeowners nationally plan to age in place in their current residence. Kentucky’s affordable cost of living and property tax homestead exemption for those 65+ provide further incentive for seniors to remain in their houses.
Boomers who locked in low 30-year mortgage rates or paid off their homes have little financial pressure to move. Over half of Boomer homeowners nationwide have no mortgage, and among those who do, 53% carry interest rates below 4%. This pattern is evident in Kentucky’s tight housing inventory: many long-time owners simply aren’t listing their homes, contributing to a statewide supply crunch of available homes for sale.
Urban, Suburban, and Rural Patterns
Urban Preferences
In urban areas like Louisville and Lexington, some empty-nest boomers have shown interest in downsizing to condos, townhouses, or age-friendly communities with walkable amenities. Researchers anticipated that boomers would choose “affinity locations” such as college towns for retirement more than the previous generation.
Lexington, as a vibrant college town, and Louisville, with its healthcare and cultural amenities, have drawn a portion of retirees seeking convenient access to hospitals, entertainment, and dining. Revitalized downtown districts and mixed-use developments in these cities have attracted not only young professionals but also older adults looking for a cosmopolitan retirement lifestyle.
Louisville’s leaders have promoted downtown housing initiatives, and Northern Kentucky’s small city of Covington saw an uptick in home sales as urban living became more appealing. These trends suggest that some Kentucky boomers are embracing urban living for its convenience and social opportunities.
Suburban Stability
In suburban settings, however, many boomers are choosing to stay in place. Kentucky’s suburbs – from Jefferson County’s outskirts to Lexington’s Fayette County suburbs – are full of long-time homeowners who raised families there and have strong community ties.
With their children grown, these “empty nesters” often continue to occupy spacious single-family houses. There is little financial incentive to sell a large suburban home in Kentucky’s market, since a downsized home might not drastically cut costs and the process of selling/buying can be daunting.
Instead, boomers are often remodeling or retrofitting their existing suburban homes for retirement (for instance, adding first-floor bedrooms or modifying for accessibility) rather than relocating. This aging-in-place trend is prevalent – AARP reports over half of adults 65+ nationwide plan to remain in their homes as they age. Kentucky’s suburban boomers reflect that norm, preferring familiar neighborhoods and the comfort of a paid-off home.
Rural Realities
In rural communities and smaller cities, baby boomer behavior is a mix of staying put and selective migration. Rural Kentucky has a high share of elderly residents, many of whom remain on family farms or in small towns due to deep roots and low living costs. The slower pace and lower housing expenses in rural areas make it feasible for retirees to stay.
However, some rural boomers are moving closer to regional hubs or medical facilities as they get older. It’s not uncommon for someone from a very rural county to buy a home in a nearby small city (like Bowling Green, Owensboro, or Pikeville) to be nearer to doctors, shopping, and family.
Community feedback in Northern Kentucky stressed the need for more downsizing-friendly housing (smaller single-story homes, condos) to serve older adults leaving larger houses. Smaller Kentucky cities are trying to accommodate this with patio homes, senior apartments, and maintenance-free housing options for retirees.
Overall, rural boomers mostly age in place, but those who do move typically relocate into the nearest town or move closer to children if the support network in the countryside dwindles.
Regional Differences: Louisville vs. Lexington vs. Smaller Communities
Louisville Metro
Louisville, Kentucky’s largest metro, has a diverse housing landscape for boomers. Many Louisville boomers remain in the suburban neighborhoods of Jefferson County or adjoining counties, where they benefited from rising home values (the Louisville median home price reached roughly $250,000 by 2023).
Some have capitalized on this equity to downsize within the region – for example, selling a large suburban house at a premium and purchasing a newer, smaller home (or condo) in a maintenance-free community. Louisville’s urban core is also seeing interest from older adults who enjoy cultural amenities.
The city’s status as an emerging “aging care” hub (home to numerous senior care businesses and initiatives) underscores a local commitment to senior-friendly infrastructure. Nonetheless, the majority of Louisville boomers have held on to their homes for longer, contributing to low inventory in desirable suburban markets.
According to Kentucky Realtors, low housing inventory in urban markets like Louisville has been a barrier for would-be buyers, partly because many owners haven’t listed their homes despite high prices. This suggests that even in Louisville’s hot market, boomers have been reluctant to sell and move unless they have a compelling reason (such as retirement relocation or health needs).
Lexington and Central Kentucky
Lexington, the second-largest city, is somewhat unique because it is a college town (University of Kentucky) and has a high quality of life that appeals to retirees. Studies predicted that Lexington would attract in-migrating boomers looking for an active retirement in a college town setting.
Indeed, Lexington’s population of adults 60+ has grown in the past decade, indicating some boomers moving in (as well as locals aging into that group). Lexington-area boomers often face a constrained housing supply due to the city’s growth boundary and limited new construction, which has driven up prices.
Many long-time Lexington homeowners have seen significant equity gains. Those who do sell are often moving to surrounding counties – for example, buying homes in nearby smaller towns (Georgetown, Versailles, Richmond) where they can get similar homes at lower cost while staying close to Lexington’s amenities.
Others remain in place; Lexington’s boomers, like Louisville’s, show strong attachment to their homes. They spend a smaller share of income on housing on average, thanks to Kentucky’s affordability, so the economic pressure to downsize is limited.
Lexington has also developed more age-targeted communities (like 55+ developments and luxury condos) in recent years, which have attracted some upscale boomer buyers. But in general, boomers in Central Kentucky are balancing a desire for convenience and healthcare access with the familiarity of their long-time homes.
Smaller Cities and Rural Regions
In Kentucky’s smaller metropolitan areas (such as Bowling Green, Owensboro, Paducah) and rural regions, baby boomer trends tend to reflect the local economic conditions. Many boomers in these areas remain in their homes because housing costs are relatively low and communities are tight-knit.
For example, a retired couple in a small town may have a home fully paid off with taxes of only a few hundred dollars a year – an extremely affordable situation that’s hard to give up. On the other hand, these areas often lack downsizing options; smaller cities are now recognizing a need to build more patio homes, condos, and apartments suitable for seniors.
If those options aren’t available, boomers either stay in larger-than-needed homes or move away. We have seen some migration of retirees out of state: Kentucky is not traditionally a top retirement destination, and some local boomers do head for warmer climates or to be nearer to children in other states.
But overall, most boomers in Kentucky’s small communities have aged in place, resulting in a graying population in many counties. This can be seen in census data – the median age in numerous Kentucky counties has climbed as boomers there remain, while younger people often move out.
In Northern Kentucky (the counties near Cincinnati), an interesting trend is emerging: efforts to revitalize urban cores (Covington, Newport) have started to attract both young professionals and some boomers back from the suburbs. If these regional initiatives succeed, they could slow or even reverse the decades-long pattern of boomer out-migration from city centers.
Motivations Behind Changing Boomer Homebuying Behavior
Affordability and Cost of Living
Kentucky’s relative affordability has been a double-edged sword for boomer homebuying. On one hand, lower home prices and property taxes (with the senior homestead exemption) make it affordable for boomers to remain in their longtime homes without financial strain.
On the other hand, when boomers do look to move, affordability is a key motive – some downsize to reduce upkeep costs or to free up home equity for retirement expenses. Over 2018–2023, home values in Kentucky rose steadily (median prices up about 6–9% year-over-year in recent years), boosting boomer homeowners’ wealth.
Those gains have enabled some boomers to cash out and relocate either within Kentucky or to lower-cost locales. Affordability also influences where they move: many who downsize seek homes with lower utility bills, maintenance costs, and taxes. Kentucky’s low cost of living often means boomers can find such savings without leaving the state.
Downsizing and Lifestyle Changes
As empty nesters, many boomers eventually want a more manageable home. Downsizing has been a notable trend, though not as widespread as once expected. Some Kentucky boomers in their 60s and 70s have traded large four-bedroom houses for smaller one-level homes or condos that are easier to maintain.
Common reasons include the desire for a smaller, more accessible space, less yard work, and the ability to lock-and-leave for travel. In Lexington and Louisville, builders have reported strong demand for patio homes and condos from retiring boomers.
However, a “Silver Tsunami” of mass downsizing has not occurred – research suggests it’s more of a gradual tide, as not all boomers plan to move and those who do will stagger it over many years. In fact, more than half of boomers say they don’t intend to move at all in retirement.
This measured pace of downsizing is evident in Kentucky, where listings of larger homes by senior sellers have trickled in slowly rather than flooding the market. Still, downsizing remains an aspiration for a subset of boomers seeking simplicity or an “empty nester” lifestyle.
Economic Factors: Interest Rates and Market Conditions
The economic climate of 2018–2023 has strongly influenced boomer behavior. Initially, low mortgage rates and a booming stock market (pre-2022) made it financially attractive for boomers to buy second homes or relocate. Some boomers took advantage of 3–4% interest rates to purchase retirement homes or investment properties in the late 2010s.
However, by 2022–2023, rising mortgage rates (hitting 6–7%) had an opposite effect – many boomers stayed put to keep their ultra-low rates on existing homes. A large share of boomers refinanced or bought during the low-rate era, and they are reluctant to take on a new mortgage at today’s higher rates.
This interest rate “lock-in” effect has reduced the number of boomer listings and purchases in the past two years. Additionally, economic uncertainty (e.g. the 2020 COVID-19 pandemic, inflation in 2022) made some boomers cautious.
During the pandemic, older Americans were actually less likely to move than expected – many hunkered down, perhaps due to health concerns and volatile conditions. Conversely, the strong seller’s market through 2021 motivated some boomers to sell at peak prices and either rent or move closer to family.
In summary, boomers have been weighing the robust gains from selling (high prices) against the costs of buying again (higher rates and prices elsewhere), leading many to either stay put or only move locally where they can pay cash or carry no mortgage.
Tax Incentives and Policies
Tax considerations also play a role in boomer decisions. Kentucky offers a homestead exemption for homeowners 65+, shielding a portion of a home’s value from property taxes. This effectively lowers the annual tax bill for senior homeowners and encourages them to remain in their existing homes.
A boomer in Kentucky might pay far less in property tax by staying than if they sold and moved to a similarly priced home before age 65 (losing that exemption). On the federal side, boomers consider the capital gains tax exclusion on home sales (up to $500,000 for couples) when deciding to sell – this can make it attractive to downsize if their home has gained significant value tax-free.
Meanwhile, changes from the 2018 Tax Cuts and Jobs Act (like the cap on state and local tax deductions) didn’t hit most Kentucky boomers as hard as those in high-tax states, so there hasn’t been a big tax-driven exodus from Kentucky.
Some boomers moving from out of state into Kentucky do so for tax reasons – for example, escaping higher taxes elsewhere or cashing out expensive property and buying cheaper in Kentucky with money left over. Kentucky does not tax Social Security benefits and exempts much of retirees’ income from state tax, which can attract retirees or encourage residents to stay put.
All told, the tax environment in Kentucky generally favors stability (staying in one’s paid-off home) over frequent moves.
Generational Wealth Transfer Considerations
The looming “Great Wealth Transfer” has subtle effects on boomer homebuying behavior. Baby boomers collectively hold an enormous amount of housing wealth – about $17 trillion in home equity nationwide (roughly 50% of the nation’s total). Surveys show that 75% of Boomer homeowners plan to leave much of their wealth to their children.
This means many are treating their homes as an asset to pass on rather than sell. In Kentucky, it’s common for a family home to be kept in the family; some boomers choose to age in place and eventually bequeath the house to their kids instead of downsizing and spending that equity.
Additionally, some boomers are helping their children or grandchildren become homeowners, thanks to their own accumulated wealth. For instance, a boomer couple might tap into home equity or savings to assist a millennial child with a down payment on a house in Louisville or Lexington.
This intergenerational support can indirectly affect boomer home purchases – a few boomers have even bought second homes or investment properties near where their adult children live, with the intent to eventually gift or sell it to the next generation.
The mindset of preserving generational wealth has likely contributed to boomers holding onto real estate. As one analysis noted, older Americans keeping their homes longer is a major factor behind rising homeownership tenure and the scarcity of homes for sale. Boomers seem inclined to only sell if needed, otherwise retaining property as part of their legacy.
Shifts Compared to the 2008–2017 Decade
Increased Market Participation
When we compare 2018–2023 to the previous decade (2008–2017), there are clear shifts in baby boomer homebuying behavior. One significant change is in market participation: in the aftermath of the 2008 housing crash, many boomers were relatively inactive – some were stuck in underwater mortgages or delaying retirement moves during the recovery.
By contrast, in the late 2010s and early 2020s, boomers became more active and even surpassed younger buyers in market share. During 2014–2017, millennials rapidly grew to dominate first-time home purchases, and boomers’ role as buyers had waned slightly.
But in the 2018–2023 period, boomers resurged as a buying force, often as repeat buyers leveraging equity to buy either upscale retirement homes or homes closer to family. This resurgence was highlighted by the National Association of REALTORS®: in 2021–2022, boomers made the highest percentage of home purchases of any generation, a stark change from the earlier 2010s when they played “second fiddle” to millennials.
Driving this was the fact that boomers in 2018–2023 had fully recovered home equity lost in the recession and benefited from a decade of price appreciation, giving them substantial buying power.
Slower Housing Turnover and Delayed Downsizing
Another shift is in housing turnover and downsizing behavior. In the 2008–2017 timeframe, as boomers hit their 60s, many were expected to downsize or relocate in large numbers. Indeed, the early 2010s saw some increase in downsizing as the housing market recovered – for example, around 2015–2017, more boomers started selling larger homes (finally above water in value) and moving to smaller ones or sunnier states.
However, the anticipated mass sell-off never fully materialized, and the trend has further diverged in 2018–2023: boomers are moving even less frequently now. Home tenure has increased significantly. Two decades ago, homeowners moved on average every 6–9 years; now that average exceeds 13 years, largely because boomers are staying put longer than prior generations did at their age.
In fact, empty-nest boomers today hold a much larger share of big family homes than they did a decade ago. A Redfin analysis found that 10 years ago, young families were just as likely as empty nesters to own large 3+ bedroom houses, but by 2022 empty-nest boomers owned twice as many of these large homes as millennials with children (28% vs 14%).
This represents a major shift from the 2008–2017 era, when more boomers would have downsized and passed the big-house torch to younger families. Now, many boomers are holding onto large homes well into their retirement, often because they can and there’s no incentive to sell.
The result is fewer large suburban homes cycling onto the market for the next generation. Kentucky’s suburbs exemplify this: neighborhoods that once might have turned over as owners aged are seeing far fewer listings, as boomers opt to age in place.
Changing Economic Context
Economic conditions between the two periods also differed. The 2008–2017 decade included the Great Recession and a slow recovery; boomers who wanted to retire or move had to navigate depressed home values, tighter credit, and perhaps depleted savings. Many postponed moves until their finances stabilized.
By 2018–2023, the economic picture was quite different: unemployment was low, and home prices were generally at record highs (especially by 2020–2022). This gave boomers confidence – those who did choose to sell often reaped large profits, and those who bought did so in a rising market.
One could argue boomers in the recent period have been more driven by opportunity (e.g. selling high, buying dream homes, seizing low interest rates while available) whereas in the earlier period they were more driven by necessity or caution (e.g. waiting out the recession, only moving if job or family required).
The COVID-19 pandemic in 2020 was a unique event that briefly disrupted trends, but by and large, boomers came out of it holding even tighter to their homes, contributing to the extremely low inventory in 2021–2023. This contrasts with, say, 2010–2012 when there was actually an excess supply of homes and boomers had difficulty selling.
Demographic Transition to Retirement
Demographically, the baby boomer cohort aged from late mid-life into full retirement between these periods, and their priorities shifted accordingly. In 2008, the youngest boomers were in their mid-40s – some still buying trade-up homes – and the oldest were early 60s, just entering retirement. By 2023, all boomers are over 59, and a large portion are in their 70s.
Thus, the earlier decade saw boomers in transition (kids leaving home, careers ending, some relocations for lifestyle) whereas the 2018–2023 period has more boomers in settled retirement mode. Consequently, aging in place has become more dominant now than it was when boomers were younger.
Earlier, downsizing might have meant moving from a two-story to a ranch house in the same town; now it might mean installing a stair lift and staying put. Kentucky authorities have noted that the real crunch in senior housing needs would come when the bulk of boomers reach old age in the 2010s and 2020s, as most seniors wish to remain in their homes and will need services to do so.
That prediction has proven accurate – the state is now seeing increased demand for home modification programs, senior home repair assistance, and similar efforts to help boomers remain where they are. The previous generation (the Silent Generation) was more likely by their late 70s to downsize or move to senior living, but boomers are charting a different course by trying to maintain independence at home longer.
References
- Baby Boomers Edge Out Millennials as Top Buying Force – National Association of REALTORS® Magazine
- More Than Three-Quarters of Baby Boomers Plan to Stay In Their Home As They Grow Older – Redfin
- Empty Nesters Own Twice As Many Large Homes As Millennials With Kids – Redfin
- Kentucky | Urban Institute – Urban Institute
- The Deadline to File for a Homestead Exemption is December 31 – Dean Dorton
- Freddie Mac: Baby Boomers Control Massive $17T in Home Equity, 75% Plan Wealth Transfer to Children – Stock Titan
- Regional leaders convene to pitch solutions for housing crisis: ‘This is a solvable problem.’ – LINK nky
- Louisville KY Housing Inventory: Market Update 2025 – Louisville Homes Fast
- Why Louisville Has Made Aging Care a Top Priority – Next Avenue
- Kentucky Realtors December 2024 market data signals competitive environment for homebuyers – NKY Tribune
- Kentucky Housing Market – Real Estate – Bankrate – Bankrate
- Realtor Association of Southern Kentucky – Boomers Moving Will Be More Like a Gentle Tide Than a Tsunami – RASK Realtors
- Baby boomers aren’t downsizing, and it’s straining the housing market – Reddit
- Housing Market Study – Lexington-Fayette Urban County Government – Lexington CLT
- 2022 Home Buyers and Sellers Generational Trends Report – National Association of REALTORS®
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