Dealt an arguably easier hand than their children, many parents report making a financial sacrifice to give their children a leg up and help them in the current volatile economic scene. So “younger folks looking to get on the homeownership ladder” face a big challenge in this “overlap with their parents’ generation.Īt a certain point, the millennials versus boomer battle is more the war between millennials getting help from boomers and boomers themselves. Wolf tells Fortune that one important point just shouldn’t be overlooked: Some boomers and millennials are looking for the same home and boomers are often positioned to make more competitive offers. Boomers have the advantage, while they’re looking for the same smaller house as someone pining for a starter house, and they’re often able to leverage an all-cash bid, explains Wolf.īy nature of being younger and simply unlucky when it comes to building wealth, millennials have the disadvantage when it comes to getting the house, as boomers are often coming to the market “equity rich” and less price/rate sensitive. It all leads to an awkward hello to mom when she outbids you at the open house. Most recently, Zonda found that these baby chasers are often relocating to the Southeast, a market that has become a hotspot due to its relative affordability for home buyers of all ages. According to Wolf, Zonda data shows that 25% of boomers are relocating to get closer to their grandchildren. Wolf said Zonda has started tracking this dynamic with what she calls the Baby Chaser Index, which tracks the cities where boomers follow their children most dutifully (ending up fueling greater migration patterns in formerly affordable cities like Charlotte, North Carolina). ![]() The soaring cost of childcare has boomers looking to help out their millennial kids by selling up and moving close to provide extra help rearing the pandemic babies, but that’s ironically boxing their kids (and their kids’ friends) out of the market. And many more boomers are looking to retire soon. There’s two things happening with baby boomers, as Wolf explains: Data from AARP shows that most boomers are looking to stay where they are right now, but the National Association of Realtors shows that boomers are the top buyers and sellers right now. “The key difference here is that the baby boomer will likely be able to tap home equity by selling their existing home, allowing them to perhaps make a more compelling offer on the home compared to the millennials, especially if the latter group are still renting.” Essentially, the former group is looking for their retirement home and the latter is looking for their starter home, and something has to give. “In today’s housing market,” Wolf tells Fortune, “there’s a big overlap between select baby boomers and select millennials.” She used the archetype of the empty nester boomer couple and the millennial couple with no or young children. A millennial herself, Wolf has personal experience of what her generation is up against, as she lives in southern California, a state that personifies America’s housing shortage and an ensuing generational clash.Īs baby boomers downsize and millennials finally enter the housing market, Wolf says, they are in direct competition for similarly priced and sized homes. And to top it off, one of the country’s leading housing-focused economists, herself a millennial, has crunched the numbers and found the ugly truth: That millennials’ parents, the boomers who seemed to get all the economic breaks of the last 50 years, are stealing all the starter homes and making them retirement homes instead.Ĭovering housing for at least 10 years, Ali Wolf has steadily ascended to the role of chief economist for Zonda, a distributor of housing market data and consulting. Massive student loans, the Great Recession, and a cost of living that outpaces their salaries, all keep this generation unable to build wealth like their parents and grandparents. But millennials might as well cue the sad Charlie Brown music and slink away when they look at the current state of the housing market. This coincided with the generation reaching peak homebuying age, and the second year of the pandemic saw the beginning of a baby boom, as nearly half of the generation caught the fever of the age-old American ambition to move to the suburbs. ![]() While some moved home, many were able to save up and come out of COVID-19 twice as wealthy as they were before it. Perennially offered the short end of the stick, the pandemic turned out to be a double-edged sword for millennials.
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