Baby boomers now lead in home-buying, boosted by decades of equity, while first-time buyers face record low participation amid rising costs, a new report found.
WASHINGTON — Baby boomers have surpassed millennials as the largest group of homebuyers, while first-time buyers have fallen to their lowest share since 1981, according to a new generational trends report from the National Association of Realtors.
Boomers now account for 42% of home purchases, driven largely by decades of accumulated home equity. Millennials follow at 26%, with Gen X close behind at 25%.
Many boomers are leveraging that equity to pay cash outright — sidestepping today’s elevated interest rates entirely.
First-time buyers, meanwhile, make up just 21% of the market — a record low in more than four decades of tracking. Rising home prices, higher interest rates and increasing costs for insurance and taxes have created steep barriers to entry for younger buyers.
“It is a market about being strategic,” Lane Lyon, a real estate expert, told KUSA.
Many families are turning to multi-generational living in response to affordability challenges. About 14% of buyers this year purchased a home to share with family members.
Lyon said demand for homes with main-level bedrooms and finished basements is rising sharply.
“Almost every listing that I take right now, we get calls saying, ‘Do you have a bedroom on the main level because I want to move mom in,'” Lyon said.
Lyon expects the multi-generational living trend to continue until interest rates decline.
On the selling side, baby boomers also remained dominant, making up 55% of all home sellers, the report said.
“The housing market remains sharply divided between homeowners with equity and first-time buyers trying to break in — many of whom are younger millennials,” said NAR Deputy Chief Economist Dr. Jessica Lautz. “For many younger households, affordability challenges and limited inventory are still making homeownership difficult to achieve.”
“Baby boomers are at a point in life when they have the flexibility to move, often with housing equity to help purchase their next home,” Lautz said. “In earlier years, baby boomers — like millennials today — may have moved because of a job change or the need for a larger home. Today, many baby boomers are embracing choice and moving to be closer to friends and family, to downsize, or to retire and enjoy a work-free lifestyle.”