Source: Fortune
Summary
Older Millennials, aged 36-45, have become the highest-earning and biggest-spending generation of home buyers, with a median household income of $132,700 and buying larger homes at a median 2,100 square feet. They are using home equity to trade up to more expensive properties, a strategy similar to that of Baby Boomers. Meanwhile, younger Millennials are struggling to enter the housing market due to student loan debt and credit card burdens. Baby Boomers continue to dominate the market, accounting for 42% of all buyers and 55% of all sellers, with many choosing not to downsize. The traditional American homeownership timeline has shifted, with the median age of a first-time buyer now 40.
Our Reading
The numbers tell one story.
Older Millennials are making up for lost time, leveraging home equity to trade up to bigger homes. They’re not alone – Baby Boomers are still driving the market, with many choosing not to downsize. Younger Millennials are struggling to get in, with student loan debt and credit card burdens holding them back. The traditional homeownership timeline has shifted, with 40 becoming the new prime age for buying. The market is split, with the haves and have-nots emerging along generational lines.
The announcement sounds familiar.
Home equity is the mechanism driving the transformation of older Millennials into bigger spenders. They’re using gains from their starter homes to trade up, a strategy that’s been powering Boomer dominance for decades. Meanwhile, younger Millennials are fighting to get in, with their share of first-time buyers plummeting. The record-low first-time buyer share is largely their story.
The strategy enters a familiar phase.
Older Millennials are hitting their peak career earnings and are now driving the move-up market. They’re buying larger homes and using home equity to fuel their purchases. Baby Boomers, meanwhile, are still dominating the market, with many choosing not to downsize. The traditional homeownership timeline has shifted, with 40 becoming the new prime age for buying.
Author: Evan Null
