Millennial home buyers are losing their edge to score properties in a tough, expensive housing market.
As seen in the chart below, which was presented during a National Association of Realtors’ webinar, millennials were leading home-buying for a big part of this decade, but recently started losing ground to baby boomers.
Based on the NAR’s data, 39% of home buyers are baby boomers, while only 28% were millennials.
Millennials are considered to be those between the ages of 24 and 42, per the NAR.
Baby boomers, those born in the years after WW II and aged roughly 57 to 76, have considerable equity in their current home that they can tap to produce all-cash offers, but millennials — many of whom are first-time buyers — are finding it hard to beat the competition and buy homes.
“We should see that millennials are the biggest generation of home buyers… [and] for eight years out of the last decade, they were the biggest generation,” Jessica Lautz, deputy chief economist and vice president of research at the NAR, said during the presentation.
“In the last year, unfortunately, they dropped off and we’ve seen baby boomers have taken over… [W]e are seeing that [millennials are] being priced out of the market, losing those bidding wars with all-cash buyers,” she explained.
CoreLogic recently noted that almost four in ten sales were all-cash transactions.
“Half of older boomers are all-cash buyers,” Lautz added. “So unfortunately we’re just not seeing them as active in the housing market.”
The NAR also found that there was a “dramatic shift” in the median age of a typical repeat home buyer: In 1981, they were 36 years old, and today, that buyer is typically 59.
Instead, the typical home buyer was buying their home at 36.
The price of an existing home in June was $410,200. Many home buyers, finding limited home listings on the market presently, are turning to new homes. But new homes are not much cheaper: The price of a new build in June was $415,400.