In residential real estate, baby boomers still own most of the wealth
Baby boomers cling to their homes until death do them part.
Members of the cohort born between 1946 and 1964 now own more real estate wealth than any other generation for 20 consecutive years, The New York Times reported – with no end to the streak in sight.
Years ago, this title belonged to the silent generation, which typically sold later in life and moved into extended families or assisted living, paving the way for baby boomers to take the lead in real estate wealth. in 2001.
Some may wait until retirement to sell, while others prefer to leave their domain to do the job. Until then, the younger generations are left with the shorter end of the stick.
Gen Xers (those born between 1965 and 1980) make up about 24% of home buyers, according to the 2021 NAR Report on Generational Trends of Buyers and Sellers. Roughly that same amount were sellers, indicating additional gains through negotiation, rather than a larger generation of long-term real estate wealth.
To be fair, Gen X has been increasing their real estate wealth, just at a slow pace. In 2011, this generation held about 21% of real estate wealth, the Times reported, citing data from the Federal Reserve. A decade later, they have gained just 10 percentage points, still lagging behind the baby boomer share of 44%.
Missing from the equation are Millennials, whose share of real estate wealth has actually declined slightly, from 11.3% in 2020 to 11.2% this year, according to the data.
It’s not like they have many other options to choose from: The supply of entry-level homes, which Freddie Mac defines as those under 1,400 square feet, is at an all-time low in Canada. 50, Insider reported.
About 418,000 entry-level homes were built each year in the late 1970s, the publication added. In 2020, that number fell to just 65,000.
With few homes available and not enough new construction, young buyers may simply have to wait their turn.
[NYT, Insider] – Cordilia James