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Many baby boomers in their youth sang in packed cars over an 8-track tape the refrain of "My Generation" by The Who: "Hope I die before I get old." Of course, that was followed by Bob Dylan's "Forever Young."
Now many members of the Me-ist generation (ages 57 to 75) are approaching their dotage in homes bought when they viewed "Thirtysomething" as the television show of their peers. Today they are sitting on high equity, growing home values and a lingering defiance of expectations — in this case moving.
Meanwhile, many of their millennial sons and daughters (ages 25 to 40) are scrambling to find the down payments to compete for the trickle of houses coming on the market at escalating prices.
The CoreLogic Home Price Insights report released Tuesday showed U.S. home prices in April, including distressed sales, were 13% higher than April 2020 and 2.1% higher than March 2021. It forecast prices will rise another 1.1% from April to May.
Frank Martell, president/CEO of the analytics company based Irvine, Calif., said rising home values are disrupting the traditional pattern of homeowners selling homes where they raised their families to scale down as they retire.
"As older homeowners become more comfortable with listing their homes, they are faced with the reality that if they sell, they may get a smaller home for the same price as what they already have," Martell said.
"Rather than decreasing their financial burden and cashing out equity to support their retirement, baby boomers may choose to stay put — which could exacerbate inventory challenges."
The sparse inventory and high demand is driving up home prices, making it harder for millennials to buy just as many are reaching their early 30s, when most people traditionally buy their first homes. And many older millennials are in the market for larger homes.
Baby boomers own about 54% of the nation's homes, and many want to sell. About 72% of those interested in selling are motivated by a desire to live elsewhere. And some want to downsize.
However, Frank Nothaft, CoreLogic's chief economist, said the higher prices have led many to wait to sell.
"Baby boomers are staying in their homes longer, slowing the pace with which existing homes come on the for-sale market," Nothaft said. "Owner occupants today have been in their homes for a median of 13 years, about 50% longer than the previous generation."
Meanwhile, many millennial renters might find the math favoring staying put in their apartments a while longer.
A LendingTree study of 2019 Census data found renters were saving more than $600 a month over homebuyers nationwide. Researchers with the Charlotte, N.C.-based mortgage broker found higher all-in costs for homeowners with a mortgage in all 50 states.
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