Boomers Are Now Buying More Homes Than Millennials, According To Bank Of America Report
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Grab your avocado toast, Millennials – the Boomers are back to making moves.
In a surprising turn of events, a new report reveals that retirement-ready Boomers are playing Monopoly in real life, buying more houses for their golden years.
Their newest strategy for living it up in retirement? Outpacing their younger counterparts in the home buying race.
In a surprising twist, Boomers are outpacing Millennials in the home buying game, according to a June 2023 Bank of America report on the housing market.
Retirement plans and a fat pocketbook appear to be driving this trend, as the older generation is leveraging their $73 trillion collective wealth to snatch up homes in hotspots like Las Vegas and Tampa, effectively making Boomers the main movers and shakers in the housing market.
While Millennials have traditionally been seen as the future of home ownership, high prices and interest rates have pushed many to the sidelines, even though they’re now in their career peak earning years. Many have opted to live at home with their parents to save on housing costs while the market has continued to tick up, outpacing earnings.
According to the Bank Of American housing report, the millennial generation is decidedly more financially strained, with 93% of 33-42 year olds needing to finance their home purchase compared to just 49% of older Boomers. their home-buying aspirations are currently more dream than reality.
Where are Millennials buying houses?
The BoA report finds that large cities like San Francisco and New York are being abandoned for both generations.
Austin has emerged as the favored destination for Millennials – a city that is also seeing a decline in its Boomer population, according to the report.
Millennials have their eyes set on the capital of Texas, leading the charge with a 16% increase in residents from this demographic in early 2023, a stride that overshadows other cities. Cleveland, Tampa, and Dallas also welcomed a modest 6% growth in Millennial population over the past three years.
However, due to affordability concerns, many from this generation are playing the waiting game in the housing market. Bank of America’s research reveals that, while on the back foot now, a sizable portion of non-buyers are keeping their dream alive, with over half still scrolling through real estate apps, looking for that perfect opportunity.
This signals that once we weather the storm of the current housing cycle, a wave of Millennial buyers could come crashing in. After all, the home ownership rate for those under 35 is at 39%, lagging 23 percentage points behind the next age group – plenty of room to grow.
In the long run, cities experiencing a Millennial boom could see their housing markets supercharged. That said, for now, Millennials are retreating from the same urban giants as their Boomer counterparts, namely San Francisco, New York, and San Jose. However, this exodus appears to be slowing down, compared to the early pandemic years, indicating a possible change in the narrative ahead.
Where are Boomers buying houses?
Meanwhile, according to the report, Baby Boomers are flocking to Las Vegas, Phoenix, Tampa, and Orlando, making these cities the new darlings of the retiree set. It’s worth noting, however, that the migration pace to Vegas and Phoenix has lost some steam in the past year, while the influx into Tampa and Orlando has held steady. This enduring appeal of Tampa and Orlando could be a key puzzle piece in understanding why home prices in these cities continue to robustly climb the ladder, defying trends in other urban locales.
But this isn’t a story of flight – it’s a story of opportunity. As Boomers search for a cozy spot to enjoy their golden years and Millennials patiently wait for their slice of the housing pie, one thing is clear: when it comes to the housing market, age is more than just a number. The financial clout of Baby Boomers is leaving a mark, while Millennials’ future potential remains a looming, significant force.
The report found that millennials are still considerably behind Baby Boomers in wealth generation. Bank of America estimates that Boomers have some $73 trillion in assets as of 4Q 2022, which is a stragger eight times the wealth of Millennials.
So while social media and the digital age may be Millennial territory, when it comes to the realm of real estate and wealth accumulation, the Baby Boomers are far from handing over the reins. Their commanding $73 trillion asset pool stands as a towering testament to this generational financial divide.