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Boomers’ grip on housing market leaves younger buyers out in the cold
Generation has held the most real estate wealth for 20 straight years as Millennials’ share plateaus
Baby boomers are holding on to their homes ‘til death do them part.
Members of the cohort born between 1946 and 1964 have now held more real estate wealth than any other generation for 20 consecutive years, the New York Times reported — with no end to the streak in sight.
Years ago, that title belonged to the Silent Generation, who generally sold later in life and moved in with extended families or to assisted living facilities, paving the way for boomers to take the lead in real estate wealth in 2001.
Some may wait until retirement to sell, while others would rather leave their estate to do the work. Until then, younger generations are left with the shorter end of the stick.
Generation X (those born between 1965 and 1980) makes up about 24 percent of home buyers, according to the NAR 2021 Home Buyers and Sellers Generational Trends Report. About that same amount were sellers, indicating incremental gains through trading up, rather than larger generation of long-term real estate wealth.
To be fair, Generation X has been growing its real estate wealth, just at a slow pace. In 2011, members of this generation held about 21 percent of real estate wealth, the Times reported, citing Federal Reserve data. A decade later, they only gained 10 percentage points, still trailing behind the boomers’ share of 44 percent.
Missing from the equation are the Millennials, whose share of real estate wealth actually decreased slightly, from 11.3 percent in 2020 to 11.2 percent this year, according to the data.
It’s not like they have many other options to choose from: The supply of entry-level homes, which Freddie Mac defines as those under 1,400 square feet, is at its lowest level in 50 years, Insider reported.
About 418,000 entry-level homes were built every year in the late 1970s, the publication added. In 2020, that number fell to just 65,000.
With few homes available and not enough new ones being built, younger homebuyers might simply have to wait their turn.