You don’t have to be in the market for a new home to know that the prospect has become all but unaffordable for millions of Americans. But there are still houses on the market that are apparently being scooped up by eager buyers.
And those buyers are often Baby Boomers.
Homebuying by the numbers
All it takes is a cursory look at the latest statistics released by the National Association of Realtors to understand that young adults have all but been removed from the housing market in our current economy.
Here are a few key takeaways from a report released earlier this week:
- The average age of a repeat home buyer hit 58, which is 22 years older than in 1981.
- For first-time buyers, the average age is mid-30s, compared to late-20s about 40 years ago.
- The share of first-time buyers is shrinking, making up less than a third of the market.
It’s not all that shocking that older adults are in a better position to buy homes even when mortgage rates are high and selling prices are climbing.
Many boomers have a nest egg built up over decades of work and many of them make a profit on the sale of existing homes, offsetting costs associated with buying a new — often downsized — residence.
Making matters worse
If you are a younger adult looking to buy that first house, it probably seems like the deck is stacked against you. Eager older buyers are keeping demand high and supply low, which only makes it more expensive for everyone.
And economist Jessica Lautz of the NAR said boomers are in a prime position, explaining: “If there’s a multi-offer situation, an all-cash buyer or someone who has a lot of equity is likely to win. And that person is going to be older.”