Whether you are thinking about buying or selling a house right now, there is a good chance you are a baby boomer… or are supported by one. Many baby boomers have benefited from the skyrocketing values of their homes, leading to historically high levels of housing wealth.
This wealth has enabled them to side-step mortgages and pay cash, avoiding high interest rates. The National Association of Realtors reported that baby boomers make up 39% of home buyers this year, the most of any generation… up from 29% last year. Redfin reported that the share of all-cash purchases increased to one-third this year, the highest level since 2014.
Many baby boomers are downsizing and using the cash from the sale of their existing home to pay cash for their new home… and many are also helping their children become homeowners. It is interesting that the homeownership rate of Gen Z (age 18-27) has now surpassed that of Gen X (age 44-59) who already owned homes.
Housing wealth has trickled down to middle class baby boomers… a windfall at a time when they are preparing to make housing changes. In the words of Jessica Lautz, NAR deputy chief economist and vice president of research…
“Baby boomers have the upper hand in the home-buying market. The majority of them are repeat buyers who have housing equity to propel them into their dream home – be it a place to enjoy retirement or a home near friends and family. They are living healthier and longer and making housing trades later in life.”
Sharlene Hensrud, RE/MAX Results – shensrud@homesmsp.com
