Monday, June 17, 2024
HomeReal EstateBoomers, millennials locked in ‘showdown’ over housing: Fortune | Black Kite Express

Boomers, millennials locked in ‘showdown’ over housing: Fortune | Black Kite Express

As baby boomers increasingly seek to age in their own homes (a scenario supported by both the preferences of older homeowners and the realities brought on by high mortgage rates), this clashes with the desires of millennials who They want to enter the real estate market. as the combination of limited inventory and high costs keeps these buyers on the sidelines of the mortgage market.

This is stated in a recent column published by Fortunewhich examined the dynamics that could contribute to boomers staying in their homes longer, while many millennials face the challenge of entering the housing market in the first place.

Data shared with the outlet indicated that baby boomers represent approximately one-third of all homeowners in the United States. They have an added incentive to stay where they are, especially if they have a low pre-2022 mortgage rate or if their house is paid off, the column said.

“(I)n our current environment, where mortgage rates have skyrocketed from record lows during the pandemic to a more than two-decade high in October of last year, not having mortgages is like finding the mother lode,” the column said. “That’s partly why boomers aren’t moving, because why give up no mortgage rate, or a substantially lower one, for one that’s in the 7% range plus a higher monthly payment?”

Other factors keep millennials on the sidelines. The salary needed to buy a starter home, for example, has almost doubled since the beginning of 2019, according to data from red fin. Meanwhile, inventory levels remain at historic lows, contributing to a serious lack of affordability across the country.

On top of this, baby boomers are sticking with their larger homes that feature three or more bedrooms, according to data released by Redfin in January.

While these factors combine to encourage baby boomers to stay put, older Americans may also be choosing to age in place based on comparisons with other options, such as dedicated long-term care or senior living facilities. . According to a recent report by The Associated Press.

But not all boomers and millennials are caught in this dynamic. Recent data from the National Association of Realtors (NAR) also showed that millennials recently overtook baby boomers as the top home-buying demographic.

“The generational tug-of-war between millennials and baby boomers continued this year, with millennials rebounding to capture the largest share of homebuyers,” Jessica Lautz, deputy chief economist and vice president of research at NAR, said in the report. .

“This notable increase is attributed to both younger millennials becoming first-time homeowners and older millennials transitioning to larger homes to accommodate their changing needs,” he added.

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