Business
Generation Stuck: Why aren’t Baby Boomers downsizing and freeing up homes?
By Jake Beardslee · January 16, 2024
In brief…
- Boomers own the most large, family-sized homes but aren't downsizing, squeezing inventory.
- High prices and rates have priced out Millennials and Gen Zers with kids.
- In 2012, Gen X and Millennials owned comparable shares, but Boomers still the most.
- Lower rates help affordability but won't spur a huge wave of Boomer sales.
Homeownership has historically been a milestone for young families, but skyrocketing home prices and mortgage rates are putting the “American dream” out of reach for many Millennials and Gen Zers with kids. According to a new Redfin analysis, empty nest Baby Boomers now own 28% of large family homes, while Millennials with kids own just 14%.
As Redfin economist Sheharyar Bokhari told CNN, “Boomers love their homes. Even if they did want to sell, it is now prohibitively expensive for many Millennials.” While rates are starting to fall from recent highs, most homeowners locked in sub-6% mortgages are unwilling to take on a higher rate by selling. Additionally, half of older homeowners own their homes outright, so there’s little financial incentive to downsize.
The analysis found a major shift from 2012, when Gen Xers and Millennials with kids owned comparable shares of larger homes. But empty nester Boomers have always occupied the most, loving the space and familiarity. Their reluctance to sell is crushing inventory, according to Redfin, keeping prices high and homeownership out of reach.
While move-down demand is increasing slightly with lower rates, Bokhari cautioned: “There won’t be a flood of inventory. There will be a trickle.” In a glimmer of hope, improving affordability in 2024 may help young families, but a “Silver Tsunami” of Boomers selling is unlikely.