It’s Baby Boomers vs. Millennials in the Housing Market’s Hunger Games—Guess Who’s Winning?
Photo-Illustration by Realtor.com; Source: Getty Images (2)
It’s baby boomers versus millennials in the housing market’s own version of “The Hunger Games.” And in today’s cutthroat environment, where there is a severe shortage of homes for sale and cash reigns supreme, boomers are winning the war, hands down.
The percentage of millennial and first-time homebuyers plummeted as they were confronted by record-high home prices, raging competition, and an influx of all-cash offers. Meanwhile, boomers—the wealthiest generation—went on a buying spree. Many of them traded one home for another, using the proceeds from their sales to purchase their next pieces of real estate. Some were able to do so without a mortgage, which created another substantial advantage.
“Many millennials could be looking at their boomer parents with a little envy this year,” says Jessica Lautz, the National Association of Realtors vice president of research. Boomers “were able to purchase their dream homes when millennials weren’t even able to find a home to compromise on.”
The report is based on a survey of nearly 5,000 buyers who purchased a primary residence in the 12 months ending June 2022.
Who are today’s homebuyers?
Boomers became the largest homebuying group, closing on 39% of all U.S. homes, according to the National Association of Realtors®’ 2023 Home Buyers and Sellers Generational Trends report. That was up from 29% in the previous year.
Meanwhile, the share of millennials who successfully closed on homes fell to 28%, down from 43%. This was the first time since 2014 that millennials didn’t make up the largest percentage of buyers, as this group has been struggling with rising rents, student debt, and childcare costs. High home prices and rising mortgage interest rates made achieving homeownership even more financially challenging for millennials.
The percentage of first-time buyers—the group without any existing home equity to sink into their next purchases—dipped to 26%. This was down from 34% in the prior year and was the lowest percentage since NAR began measuring their home purchases in 1981.
“Boomers have the money, and they have the housing equity, and they were able to win out on multiple-bid situations by either paying all cash or putting down a significant down payment,” Lautz says. “They’re not downsizing. Baby boomers are purchasing the same size of home or larger than what they were living in before.”
Generation X, that often forgotten group—currently ages 43 to 57—represented about 24% of buyers. Meanwhile, the Silent Generation, 77 to 97, purchased about 4% of homes.
One bright spot was that the share of Generation Z buyers doubled from 2% to 4% of all sales. This group of buyers, ages 18 to 23, purchased the smallest homes—typically under 1,500 square feet.
“We are seeing them sneak into the homebuying market,” says Lautz.
But to be successful, many are receiving help. Nearly one-third of Gen Z buyers lived with family and saved up before becoming homeowners.
Who are today’s home sellers?
The pandemic, and the remote-work arrangements it forged, appears to have altered migration patterns as buyers sleuth out more affordable real estate markets. Home sellers who moved, generally did so to be closer to their friends and families—and increasingly traveled further to be near them. Sellers who relocated moved a median 50 miles away from their previous homes, up from 15 miles last year.
Unsurprisingly, baby boomers were also the largest group of home sellers at 52%. That was up from 42% in the prior year.
“With each added year in their homes before selling, they’re likely adding equity they can use to buy their next home,” says Lautz.
The post It’s Baby Boomers vs. Millennials in the Housing Market’s Hunger Games—Guess Who’s Winning? appeared first on Real Estate News & Insights | realtor.com®.
