Baby boomers are selling their homes, and millennials are buying—it’s a ‘generational tug of war'
It’s not a battle of the sexes in the housing world: It’s a battle of the generations. Millennials surpassed baby boomers as the largest generation of homebuyers, totaling 38%, whereas baby boomers made up 31% of recent homebuyers, according to the National Association of Realtors’ latest generational trends report.
“The generational tug-of-war between millennials and baby boomers continued this year, with millennials rebounding to capture the largest share of homebuyers,” NAR’s deputy chief economist and vice president of research, Jessica Lautz, said in an accompanying release. “This notable rise is attributed to both younger millennials stepping into homeownership for the first time and older millennials transitioning to larger homes that suit their evolving needs.”
Younger millennials (25 to 33 years old) made up a smaller share of homebuyers for the generation, but interestingly enough, 24% of them moved directly from a family home before buying their own. Nevertheless, 75% of younger millennials and 44% of older millennials were first-time buyers. And they got help from their parents; 24% of younger millennials got money from their family for a down payment. (A recent survey found more than a third of millennials and Gen Zers who are planning to buy a home expect their parents, or family, to help with their down payment.) On the other hand, younger baby boomers (59 to 68 years old) made up a larger share of homebuyers within their cohort. Still, the entire generation primarily bought homes closer to family, or in an effort to downsize.
It’s not an easy time to buy a home. One analysis found that buyers need to make $30,000 more than they currently do to afford a median-priced home; another found the salary Americans need to afford a starter home has almost doubled since the pandemic. Home prices skyrocketed during the pandemic, and mortgage rates surged not long after.
As for sellers, baby boomers make up the largest share—45% to be exact. The same reasons why they are buying homes are why they’re selling: downsizing and wanting to be closer to family and friends. But baby boomers normally owned their homes for 15 years before selling. Millennials, however, sell because their homes aren’t big enough for their growing families and make up 40% of sellers.
“Baby boomers continue to dominate the home-selling market as they make pivotal decisions regarding their retirement living situations, whether it’s rightsizing or moving closer to loved ones,” Lautz said. “Benefiting from longer periods of homeownership compared to other generations, boomers approach these transactions with substantial equity, enabling strategic housing trades.” Simply put, we can assume baby boomers are having a much easier time buying another home given how much equity they’ve built.
Baby boomers kept the housing market alive and are still powering it, as Fortune has previously reported (they also hold half of the country’s wealth). Still, not all baby boomers are selling. An earlier analysis found that empty-nest boomers own 28% of the country’s large homes—homes that millennials need. It’s simple; it doesn’t make sense to sell right now.
Now, to the less popular generations in the housing market, that is. Gen Zers only made up 3% of buyers (31% were single women) and 2% of sellers. But their demographics are different from previous homebuyer generations: For one, they’re largely single.
Gen Xers made up 4% of buyers, but they are some of the highest earners, and purchase the second-largest homes. And finally, the silent generation made up 4% of buyers. Not to mention, 33% of that generation bought senior-related housing, so homes in retirement communities or nursing homes.
