Boomers Won’t Part With Their Homes, Leading to Shortage for Young Families

Baby boomers appear to have a stranglehold on the housing market, inevitably taking homes away from young families. A new report by a leading housing website reveals that empty-nest baby boomers own 28% of the nation’s large homes, while millennials with kids own just 14%.

Redfin reports that empty nesters continue to keep their homes because “affordability was better when they were young, and there’s no financial incentive to sell now.” At this point, most boomers own their homes outright, and many who do have a mortgage have one with a low rate.

“Boomers love their homes. Even if they did want to sell, it is now prohibitively expensive for many Millennials,” Sheharyar Bokhari, the senior economist at Redfin who completed the analysis, told CNN. “These are larger homes where there are only one or two people living there and, typically, they bought it a while ago, so it has value.”

The site reports that the home-owning landscape has transformed over the last 10 years. A decade ago, just as many young families owned larger homes as empty-nesters.

Today, the older generation comprises 20% of home ownership in the United States, and millennials with children comprise just 18% of large homes. According to the data, most boomers — born between 1946 and 1964 — who own their homes have no mortgage. That group’s median monthly cost of owning a home is $612.

Even if they downsized, homeowners could have a nearly identical monthly payment, so the financial incentive to sell is nonexistent. Boomers experienced the opposite effect in the 1990s when the economy was booming, and an abundance of affordable, newly built homes became available.

A recent Redfin survey found that “12% of millennials who believe they’ll never own a home just aren’t interested in homeownership, and 7% said they don’t plan to buy because they don’t want to maintain a home.”

Millennials with kids take up one-quarter (24.8%) of the three-bedroom-plus rentals in the U.S., the largest share of any generational category, followed by millennials without kids (11.6%). Empty-nest baby boomers occupy the next-highest share (11.4%) of three-bedroom-plus rentals.