{"id":1455678,"date":"2024-02-06T19:25:00","date_gmt":"2024-02-07T00:25:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1455678"},"modified":"2024-02-06T19:25:00","modified_gmt":"2024-02-07T00:25:00","slug":"millennials-own-less-than-half-the-real-estate-wealth-of-boomers-can-they-catch-up","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/millennials-own-less-than-half-the-real-estate-wealth-of-boomers-can-they-catch-up\/1455678\/","title":{"rendered":"Millennials Own Less Than Half The Real Estate Wealth Of Boomers… Can They Catch Up?"},"content":{"rendered":"

Millennials Own Less Than Half The Real Estate Wealth Of Boomers… Can They Catch Up?<\/span><\/p>\n

\n

Authored by Dan Runkevicius via CreditNews.com,<\/em><\/a><\/p>\n

The dream of homeownership is slipping away for younger generations\u2014thanks to a vicious cycle of high mortgage rates and a chronically low supply of houses.<\/strong><\/p>\n

<\/a><\/p>\n

According to the National Association of Realtors (NAR), millennials were the most active homebuyers from 2014 through 2021. Not anymore.<\/p>\n

Since early 2023, boomers have overtaken millennials, making up 39% of homebuyers\u2014the most of any generation. That’s a whopping 29% jump from a year before. Meanwhile, Gen Zers are trailing woefully behind, accounting for just 4% of home transactions, according to the latest NAR data.<\/p>\n

The way the housing market is, the trend isn’t likely to reverse anytime soon.<\/p>\n

The worst housing market for first-time buyers?<\/h2>\n

The impact of mortgage rates on the generational home divide can’t be overstated.<\/p>\n

According to\u00a0a recent report<\/a>\u00a0from\u00a0Creditnews<\/a>, more than 40% of all U.S. mortgages were obtained in 2020-2021 when interest rates were at rock bottom.<\/p>\n

And nearly two-thirds of current mortgage holders locked in rates below 4%\u2014almost 3 percentage points lower than the current 30-year mortgage rate.<\/strong><\/p>\n

The result is new homeowners must take out mortgages at much higher rates than the average rate of current mortgage holders\u2014also known as the effective mortgage rate.<\/p>\n

In fact, this gap is the widest since the 1970s:<\/strong><\/p>\n

<\/a><\/p>\n

Higher mortgage rates don’t just make houses less affordable for new buyers, they also disrupt supply.<\/p>\n

That’s because existing homeowners don’t want to sell only to give up their cheap mortgages. Consequently, whatever housing supply makes it to market comes at disproportionally higher prices.<\/p>\n

This “sit and wait” philosophy is fueling one of the largest housing shortages in America’s history.<\/strong><\/p>\n

Industry experts say a housing market is healthy when there is between\u00a0five and six months of supply<\/a>. At the current sales pace, existing home supply is roughly\u00a0half that level<\/a>.<\/p>\n

And there are few signs that supply will pick up soon. According to\u00a0the latest Redfin data<\/a>, home inventory has been in decline since last October.<\/p>\n

In these market conditions, younger first-time buyers are out of luck. Not only do they need more income, they have to outbid older buyers flush with home equity and cash.<\/p>\n

Millennials making headway but still falling behind<\/h2>\n

Despite being the largest generation entering their prime homebuying age, millennials still own a mere 18.2% of real estate wealth\u2014a far cry from boomers’ 41.6% share, according to Fed data.<\/p>\n

And while millennials made significant headway during and after Covid, their accumulation of real estate wealth still fell behind boomers:<\/p>\n

<\/a><\/p>\n

Experts think millennials will have a hard time catching up.<\/strong><\/p>\n

“Baby boomers have the upper hand in the homebuying market,” said Dr. Jessica Lautz, NAR deputy chief economist, adding: “The majority of [boomers] are repeat buyers who have housing equity to propel them into their dream home\u2014be it a place to enjoy retirement or a home near friends and family. They are living healthier and longer and making housing trades later in life.”<\/em><\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nTue, 02\/06\/2024 – 14:25<\/span><\/p>\n

\u200bRead More<\/a>\u00a0<\/p>\n

\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Millennials Own Less Than Half The Real Estate Wealth Of Boomers… Can They Catch Up? Authored by Dan Runkevicius via CreditNews.com, The dream of homeownership…<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1455678","post","type-post","status-publish","format-standard","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1455678","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1455678"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1455678\/revisions"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1455678"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1455678"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1455678"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}