Owning a home with three or more bedrooms is a lot more difficult for young families these days than it used to be.
Baby boomers with no kids at home now own twice the share of large homes than millennials with children, which is a significant shift from just 10 years prior, according to data released by Redfin this week.
Analyzing the latest census data from 2022, the real estate brokerage found baby boomer empty nesters owned 28.2% of large U.S. homes, while millennials with kids owned 14%. In the previous census a decade ago, young families were just as likely to own large homes as empty nesters.
Redfin noted that millennials (ages 26-41 in 2022) also make up the largest share of America’s adult population, at 28%, with boomers (ages 58-76 two years ago) close behind at 27%. Gen Xers (42-57) make up 25% of the population and Gen Zers (19-25) make up 12%.
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The data also shows older Americans now own a greater share of larger homes than they did when the last census was conducted, and younger families own a smaller share.
During the 2012 count, empty nesters of the “silent generation” (ages 67-84 at the time) owned 16% of the homes with three-plus bedrooms, while Gen Xers (who were 32-47 back then) with children owned a greater share, at 19%.
Redfin’s analysts determined there are both current and historic reasons for baby boomers owning an “outsized” share of large homes.
The first is that boomers have little financial incentive to sell homes right now. A majority of them (54%) own their homes outright, so taking on a mortgage at today’s high home prices and interest rates would be a costly move.
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At the same time, nearly all the boomers who do have a house payment are paying significantly lower mortgage rates than today’s – which are around 6.66% according to Freddie Mac – so downsizing would likely mean paying the same amount each month for a smaller home with little to no equity.
“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.”
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“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,” Bokhair explained. “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.”