The baby boomer generation, born between 1946 and 1964, has 3.6 times as much real estate capital as the millennial generation, born between 1981 and 1996.
- A new Redfin study released on Friday shows that the U.S. housing market has grown to a total worth of $46.8 trillion in value as of June.
- This breaks the previous historic record of $46.6 trillion and reflects a high-value homes market and sluggish sales.
- Divided among generations, the Silent Generation holds $4.7 trillion, the baby boomers hold $18 trillion, Gen X holds $13.4 trillion, and millennials hold $5 trillion.
- These numbers mean that baby boomers have three times the real estate value as millennials—despite 50% of the younger generation owning homes.
Why It’s Important
Although millennials make up the largest-growing majority of the real estate market (60%), they continue to lag behind previous generations in terms of wealth accumulation through their real estate. Millennials have overtaken the Silent Generation, but they are currently between the ages of 77 and 95 and largely moving to retirement or nursing homes—having seen their cumulative home wealth decrease by 11.4% in quarter one of 2023.
As Fortune notes, millennials are also struggling to build home equity, with their equity reportedly having dropped 18.2% year-over-year. Analysts believe millennials are using their home equity lines of credit to pay off credit card and student loan debt.
Redfin Research Lead Chen Zhao notes in the study that the dominance of the 30-year fixed-rate mortgage has created “a system of winners and losers” and that it is propping up home values. Those who bought homes during the pandemic enjoy 3% mortgage rates compared to the current 6% rates that harm new homeowners, creating a market that disincentivizes home buying.
“Millennials have never fully been able to participate in the housing market as their prior generations have, but the large millennial generation has been—and continues to be—ready to build their families. Millennials, however, have come of age over the course of troubling economic times,” Home Construction Collective COO Julia Wasserman tells Fortune.
“Right now, there is nothing to buy. This massive shortfall is especially severe in the critical entry-level price range, keeping large swaths of people from entering the market entirely. Starter homes accounted for 35% of all housing completions in 1970 and now make up less than 10%. Those who got into the housing market when interest rates were close to 0% feel locked into their choice unless forced to sell, which further limits the inventory of existing homes.”