Baby boomers hold more real estate wealth than any other generation.
The Silent Generation retained this distinction until 2001, according to Michael Kolomatsky’s analysis of Federal Reserve data for the New York Times. As was the case with older generations, many had started selling their homes to move in with their families or to assisted living or retirement homes, leaving the baby boomers to take over as the biggest owners. of real estate wealth.
But the baby boomers are now breaking the tradition. They have overtaken the Silent Generation, according to the Times data analysis, holding the greatest real estate wealth of any generation in the past 20 years. While this peaked in 2011 at around 49%, baby boomers still hold 44% of real estate wealth in 2021, compared to 31% of Gen X, the next richest generation. As a result, Gen X should have held the most real estate wealth in 2017, but they are still far behind.
It’s a sign that baby boomers are “aging in place,” Kolomatsky writes, a growing concept that the pandemic has exacerbated. This is in part because some baby boomers are wary of nursing homes in the age of Covid, he added.
But it’s also because people are reluctant to put their homes up for sale. Gay Cororaton, director of housing and business research for the National Association of Realtors (NAR), previously told Insider that some homeowners have not listed their homes as a pandemic safety measure. Others are reluctant to bring them to the market for fear they won’t be able to find an affordable replacement to buy, she said.
Rather than engaging in a scorching real estate market, many baby boomers are investing in renovations instead. With home values âârising across the country, they have become more willing to spend on renovations than previous generations, fueling a home improvement boom.
Their willingness to stay put is also worsening the housing crisis of 2021, fueled by a homeownership rush in the age of remote working. A sudden tightening in lumber supply, combined with chronic under-construction from the Great
, has turned into a historic housing shortage. If baby boomers don’t leave their homes to retire like their predecessors, the supply will only get worse.
Read more: Millennials are still being fooled by their 2nd housing crisis in 12 years
House prices have reached record highs, sparking fierce competition and heated bidding wars with all-cash offers and higher down payments. While this has alienated many aspiring homeowners from finding housing, it has been particularly bad for millennials, many of whom are looking to buy a home for the first time.
Housing was largely an unattainable dream for millennials for years. Soaring cost of living, student debt and the fallout from the Great Recession made it difficult to save for a down payment. While some were able to catch up on their savings and own a home during the pandemic, which largely led to the housing boom of 2020, as the recent National Association of Realtors Generational Trends report shows. But it turned into a dead end in 2021.
Millennials found themselves facing their second housing crisis in a dozen years. “Now that they have recovered economically and are looking to buy a home for the first time, we are facing this housing shortage,” Daryl Fairweather, chief economist at Redfin, told Insider. “They are already excluded from the housing market.”
Baby boomers are not helping matters. The longer they keep their home, the harder it will be for other generations to build wealth through real estate.