Empty-nest baby boomers own 28% of the nation’s
large homes, while millennials with kids own just 14%. The
landscape has transformed over the last decade: 10 years ago, young
families were just as likely as empty nesters to own large
homes
(NASDAQ: RDFN) — Empty-nest baby boomers own nearly 3 in 10
(28.2%) large U.S. homes. That’s twice as many as millennials with
kids, who own just 14.2% of the country’s large homes, according to
a new report from Redfin (redfin.com), the technology-powered real
estate brokerage. Gen Zers with kids own almost none (0.3%) of
them.
An additional 7.5% of the country’s large homes are owned by
baby boomers with households of three adults or more; this category
likely consists mostly of adult children living with their boomer
parents.
The report is based on a Redfin analysis of U.S. Census data
from 2022 that breaks down the share of three-bedroom-plus homes
owned and occupied by each generation, by household type and size.
For the purposes of this report, Redfin used the term “empty
nesters” to refer to households headed by baby boomers with 1-2
adults living in the home. See the report for full details on
methodology.
It’s worth noting that even though millennials with kids own
half as many large homes as empty nesters, there are more
millennials than baby boomers. Millennials make up roughly 28% of
the country’s adult population, the largest share of any
generation. They’re followed by baby boomers (27%), Gen Xers (25%)
and Gen Zers (12%).
Baby boomers own an outsized share of large homes for several
reasons, current and historical:
- There’s not much financial incentive to let go of large
homes. Most (54%) boomers who own homes have no mortgage. For
that group, the median monthly cost of owning a home, which
includes insurance and property taxes, among other costs, is just
$612. For the boomers who do have a mortgage, nearly all have a
much lower interest rate than they would if they sold and bought a
different home with today’s near-7% rates: Even if they downsized,
they may have a nearly identical monthly payment.
- For millennials and Gen Zers, it’s harder to find and afford
a home. Large homes are in short supply, largely due to the
mortgage-rate lock-in effect and a recent lack of homebuilding.
Large homes are also hard to afford: 2023 was the least affordable
homebuying year on record; it was especially hard for younger
Americans who don’t have equity from a prior home.
- Some young Americans don’t want to own a home. A recent
Redfin survey found that 12% of millennials who believe they’ll
never own a home aren’t interested in homeownership, and 7% said
they don’t plan to buy because they don’t want to maintain a
home.
- Boomers built wealth. Many older Americans benefited
from an abundance of newly built homes and favorable economic
conditions during their prime moneymaking years, during the 1990s
economic boom. Those homes proved to be good investments: Home
values have grown four times faster than incomes over the last
several decades. Today, boomers hold half of the wealth in the
U.S., and much of it is in real estate.
- Boomers are older, so they’ve had more time to buy
homes.
“There’s unlikely to be a flood of large homes hitting the
market anytime soon,” said Redfin Senior Economist Sheharyar
Bokhari. “Logically, empty nesters are the most likely group to
sell big homes and downsize: They no longer have children living at
home and don’t need as much space. The problem for younger families
who wish their parents’ generation would list their big homes:
Boomers don’t have much motivation to sell, financially or
otherwise. They typically have low housing costs, and the bulk of
boomers are only in their 60s, still young enough that they can
take care of themselves and their home without help. Still, some
boomers are ready to downsize into a condo or move somewhere new
for retirement, and the mortgage-rate lock-in effect is starting to
ease–so even though there won’t be a flood of inventory, there will
be a trickle.”
Many young families are renting large homes in the meantime.
Millennials with kids take up one-quarter (24.8%) of the
three-bedroom-plus rentals in the U.S., the largest share of any
generational category, followed by millennials without kids
(11.6%). Empty-nest baby boomers take up the next-highest-share
(11.4%) of three-bedroom-plus rentals.
45% of empty nesters own big homes, almost double the share
of millennials with kids
The above addresses the share of large homes owned by each
generation and household type. In looking at the share of each
generation and household type that owns large homes, Redfin found
that empty-nest baby boomers are almost twice as likely as
millennial families to own three-bedroom-plus homes. Nearly half
(45.5%) of one-to-two-person boomer households own large homes
while just over one-quarter (27%) of households consisting of
millennials with kids own large homes. Roughly 3% of Gen Zers with
kids own them.
What type of home do the rest of millennials with kids live
in?
Some young families rent large homes: Roughly 1 in 10 (9.3%)
millennial-with-kid households live in three-bedroom-plus rentals.
Others rent smaller units.
Other millennials live with family or roommates. Of all U.S.
millennials (whether they have kids or not), roughly 17% of them
live with a family member in a home that family member owns or
rents–most likely their parents. Another 10% live in a home owned
or rented by someone they’re not related to–most likely a roommate.
Seven in 10 are the head of their own household, whether they’re
owning or renting.
Older Americans own a much bigger share of large homes than
they did 10 years ago, and young families own a smaller
share
Who owns large homes has changed over the last decade. In 2012,
empty nesters of the silent generation (who were 67-84 at the time)
took up 16% of three-bedroom-plus homes. That’s a smaller share
than Gen Xers (who were 32-47 at the time) with kids, who took up
19% of those large homes.
But one thing has remained the same over time: Baby boomers with
no kids living at home take up the lion’s share of big houses. In
2012, empty-nest boomers (who were then 48-66) owned and occupied
26.4% of three-bedroom-plus homes in the U.S., comparable to
today’s share.
Empty nesters take up at least 20% of large homes everywhere
in the U.S.
Empty-nest baby boomers take up the biggest share of large homes
in relatively affordable Rust Belt and southern metros. Baby
boomers with one or two people in the household take up roughly
one-third of three-bedroom-plus homes in Pittsburgh, PA (32.1%),
Birmingham, AL (31.1%) and Cleveland, OH (30.8%), the highest
shares in the nation. Next come Buffalo, NY (30.5%) and Virginia
Beach, VA (30.4%). Demographics are one reason why Pittsburgh tops
this list; the metro skews older: Baby boomers make up 40% of
Pittsburgh’s households, a far higher share than Gen Xers (27%) or
millennials (20%).
Empty nesters own at least 20% of large homes everywhere in the
country. They take up the smallest share of three-bedroom-plus
homes in popular migration destinations and California metros:
Riverside, CA (21.9%), Salt Lake City, UT (22%), Austin, TX
(22.2%), Houston (23.2%) and San Jose, CA (23.7%).
No matter the metro, millennials with kids take up no more
than 18% of three-bedroom-plus homes
Young families take up the smallest share of large homes in
coastal California and Florida, where large homes tend to be more
expensive, and the largest share in relatively affordable inland
metros.
Just about one of every 10 three-bedroom-plus homes are owned
and occupied by millennials with kids in Los Angeles (9.4%), San
Jose, CA (10.4%), San Francisco (10.9%), Miami (11.2%) and New York
(11.8%) Millennials with kids have the largest share in
Indianapolis, IN (17.6%), Minneapolis (17.4%), Cincinnati, OH
(17%), Kansas City, MO (16.5%) and Riverside, CA (16.5%).
To view the full report, including, charts and metro-level data,
please visit:
https://www.redfin.com/news/empty-nesters-own-large-homes
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate
company. We help people find a place to live with brokerage,
rentals, lending, title insurance, and renovations services. We
also run the country's #1 real estate brokerage site. Our
home-buying customers see homes first with same day tours, and our
lending and title services help them close quickly. Customers
selling a home in certain markets can have our renovations crew fix
up their home to sell for top dollar. Our rentals business empowers
millions nationwide to find apartments and houses for rent.
Customers who buy and sell with Redfin pay a 1% listing fee,
subject to minimums, less than half of what brokerages commonly
charge. Since launching in 2006, we've saved customers more than
$1.5 billion in commissions. We serve more than 100 markets across
the U.S. and Canada and employ over 4,000 people.
For more information or to contact a local Redfin real estate
agent, visit www.redfin.com. To learn about housing market trends
and download data, visit the Redfin Data Center. To be added to
Redfin's press release distribution list, email press@redfin.com.
To view Redfin's press center, click here.
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version on businesswire.com: https://www.businesswire.com/news/home/20240116359240/en/
Redfin Journalist Services: Angela Cherry, 913-638-8249
press@redfin.com
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