Buying a home is getting harder and harder for younger generations, and a recent report has found that part of the reason is that older generations aren’t selling their bigger homes despite being empty nesters.
A report released from Redfin this month found that empty-nest Baby Boomers owned 28% of large homes, described as homes with three bedrooms or more, compared to 14% being owned by Millenials and 0.3% owned by Gen Z.
The report highlights the disparity in homeowners among generations, as even though Millenials with kids own half as many large homes as empty nesters, they make up the largest percentage of the country’s adult population at around 28%, 2022 Census data shows.
Still, not all of the nation’s Baby Boomers are living alone, as the report found that 7.5% of the country’s large homes are owned by those in the generation with three adults or more living in the home. The report says this likely represents adult children living with their boomer parents, a trend that has been on the rise since the pandemic.
However, when looking at the upcoming year and what’s available on the market, Redfin Senior Economist Sheharyar Bokhari says there isn’t likely to be an influx of available large homes.
“There’s unlikely to be a flood of large homes hitting the market anytime soon,” Bokhari said in the report. “Logically, empty nesters are the most likely group to sell big homes and downsize: They no longer have children living at home and don’t need as much space. The problem for younger families who wish their parents’ generation would list their big homes: Boomers don’t have much motivation to sell, financially or otherwise. They typically have low housing costs, and the bulk of boomers are only in their 60s, still young enough that they can take care of themselves and their home without help.”
This trend has then affected those who are trying to become first-time homebuyers, as those ready to upgrade to large homes simply aren’t seeing the inventory necessary to make the jump.
In fact, the report highlighted that many young families are instead renting while they wait for changes in the market. Right now, 28.4% of three-bedroom-plus rental homes are taken by Millennials with kids.
The next biggest chunk, 11.4%, is taken up by Millennials without kids, meaning more than a third of all larger rental homes are being rented by Millennials.
While some hoped this year would see a flood of available homes, Bokhari says it’s more likely to “be a trickle.”
If first-time buyers want to get into a large home now, Bokhari says they should instead look at building new.
“Almost all newly built homes have three bedrooms or more, and there are a fair amount of them on the market as builders try to get rid of surplus homes they started building at the height of the pandemic buying boom,” the report said. Some builders are even offering incentives like mortgage-rate buydowns or free upgrades to get new homes off their books.”