In a surprising turn of events, baby boomers have reclaimed their position as the dominant force in the U.S. housing market, surpassing millennials in home purchases for the first time in years. According to a new report from the National Association of Realtors (NAR), baby boomers accounted for 42% of all homebuyers in the past year, while millennials made up only 29%. Just a year earlier, millennials had represented 38% of buyers compared to 31% for boomers, indicating a significant shift in the housing landscape.
This shift is not merely a statistical anomaly; it reflects the broader challenges facing younger buyers today. High mortgage rates, soaring home prices, and a low inventory of available homes have made it increasingly difficult for millennials to enter the market. The share of first-time homebuyers has dropped to 24%, down from 32% the previous year, highlighting the growing affordability crisis.
Jessica Lautz, NAR's deputy chief economist and vice president of research, commented on the situation, stating, "What’s striking is that half of older boomers [ages 70-78] and two out of five younger boomers [ages 60-69] are purchasing homes entirely with cash, bypassing financing altogether." This contrasts sharply with younger buyers, where over 90% of those aged 44 and younger financed their home purchases. Additionally, many millennials are relying on financial support from family, with 27% of younger millennials (ages 26 to 34) and 13% of older millennials (ages 35 to 44) citing gifts from relatives or friends as part of their down payment.
The generational divide in homebuying is further underscored by the fact that baby boomers also constituted the largest share of sellers at 53%. This trend is somewhat encouraging, as empty-nest baby boomers own nearly 30% of large U.S. homes—twice as many as millennials with children. Nearly 30% of baby boomers in the NAR report indicated that their primary reason for buying was a desire to downsize to smaller homes.
As experts speculate about a potential "silver tsunami"—a wave of older homeowners downsizing—there's a mix of optimism and concern regarding the housing supply. While some believe this could boost the number of homes available for younger buyers, others warn that the supply and demand dynamics don't align across different regions.
The NAR's findings reveal a stark economic reality: baby boomers owned about 51% of all household wealth at the end of 2024, while millennials accounted for roughly 10%, and Generation X held just over a quarter. This wealth disparity plays a crucial role in the current housing market dynamics.
According to the NAR's latest generational trends report, based on survey responses from 5,390 homebuyers who purchased a primary residence between July 2023 and June 2024, the share of recent homebuyers by generation is as follows: Baby Boomers (ages 60-78): 42%, Millennials (ages 26-44): 29%, Generation X (ages 45-59): 24%, Silent Generation (ages 79-99): 4%, and Generation Z (ages 18-25): 3%. The total may not add up to 100% due to rounding.
For nearly a decade, from 2014 to 2022, millennials dominated the home-buying market, making more purchases than any other generation. However, the recent NAR report indicates a significant reversal, with baby boomers now leading the charge. As Dana Rice, a D.C.-area real estate agent, noted, "If you take a millennial who’s in the midst of having children and in their prime earning years, and they’re going up against someone who’s been earning for 30 years and has a tremendous amount of equity, who’s going to win?"
While boomers and millennials are not always competing for the same properties—many boomers are downsizing to smaller homes or condos, while millennials seek family-sized homes—the competition can be fierce when they do overlap. Lautz explained that older millennials, many of whom have locked in low interest-rate mortgages, may not feel the need to move, while younger millennials find themselves increasingly shut out of the market.
Life transitions are also influencing boomers' decisions to buy homes. Kimberly Casey, a D.C.-based agent, noted, "They’re having a lot of life transitions. There are people who are like, ‘I’ve been living at this property for 30 years, and now I want to move into the Ritz Georgetown.’" While not all boomers are moving into luxury condos, many have access to cash, often derived from home equity, which gives them an advantage over younger buyers who must consider loan interest rates.
The generational shifts in homebuying come as the median age of first-time homebuyers has risen, reaching 38 last year, according to the NAR. This contrasts sharply with the 1980s, when typical first-time buyers were in their late 20s. As homeowners increasingly represent a larger share of buyers, it’s no surprise that boomers also make up the largest share of sellers, a trend that is likely to continue as they seek to downsize or relocate.
Jessica Lautz emphasized the implications of these trends, stating, "It just underscores the housing market that we know that we have, with the haves and the have-nots. Homeowners have equity and the freedom to make moves. And potential first-time home buyers are seeing that and getting shut out." This growing divide raises questions about the future of homeownership in America and the opportunities available for younger generations.
The NAR report paints a vivid picture of the current housing market landscape, illustrating the challenges faced by millennials and the advantages enjoyed by baby boomers. As the dynamics continue to evolve, it remains to be seen how these trends will impact the future of homeownership across generations.
