U.S. News
Boomers Won’t Downsize Homes, Millennials Left Out
By Matt De Vlieger · January 21, 2024
Housing Disparity Emerges
A recent Redfin report highlights a growing housing issue as empty nest Baby Boomers own twice as many larger homes as Millennials with children. Mart Production/Pexels
Affordability Challenges
Rising home prices, stagnant wages, high mortgage rates, and a nationwide housing shortage make it difficult for young families, and even Gen Z adults, to afford family-sized homes. Kindel Media/Pexels
Boomers Went Big
Baby Boomers are opting to stay in their larger homes longer, choosing to age in place and maintain familiarity with their neighborhood. Curtis Adams/Pexels
Limited Options for Downsizing
Even if Boomers wanted to sell, a shortage of smaller homes in their neighborhoods poses a challenge, making it impractical for them to downsize. Pixabay
Ownership Disparity
Empty-nest Baby Boomers currently own 28% of large homes, while Millennials with kids own just 14%, and Gen Z families own a mere 0.3% of homes with three bedrooms or more. Monstera Production
Historical Shift
A shift from the historical norm is noted, as ten years ago, young families were just as likely as empty nesters to own large homes. RDNE/Pexels
Millennial Population Impact
Despite owning half as many large homes as empty nesters, Millennials make up around 28% of the country's adult population, the largest share among generations. Biova Nakou/Pexels
Delayed Home Milestones
The trend reveals that the well-established milestone of purchasing a family home is increasingly out of reach for many young people, contributing to delayed family planning. Karolina Grabowska/Pexels
Boomers Paid-Off
For those who own their homes outright, the median monthly cost of owning a home is just $612, providing little financial motivation for downsizing. MART PRODUCTION/Pexels
No Incentive to Sell
Despite record-high levels of home equity, over 90% of current homeowners with mortgages have rates under 6%, making it financially unattractive for them to sell and buy another home. Monstera Production/Pexels
Rate Lock-In Effect
The current average mortgage rate for a 30-year loan is around 6.6%, discouraging homeowners from selling, especially if they would end up with a higher mortgage rate. Pavel Danilyuk/Pexels
Changing Ownership Demographics
Older Americans today own a larger share of large homes compared to a decade ago, while young families own a smaller share. Pixabay
Geographical Disparities
Young families own the smallest share of large homes in coastal areas, with the Midwest having the largest share. Empty nesters own a significant portion of large homes across the country. MART PRODUCTION/Pexels
Silver Lining in 2024
The report suggests a slight improvement in affordability in 2024 as mortgage rates trend down, reducing the gap between existing and current rates for potential home sellers. RDNE/Pexels