Homes have often been selling for thousands of dollars above asking price during the recent real estate boom. And the generation that has been winning many of these bidding wars and buying a larger percentage of homes than it did a decade ago may come as a surprise: older Americans.
In 2009, people ages 18 to 39 made up nearly half of homebuyers, according a new analysis from Zillow. By 2019, that number had gone down to 42%. Simultaneously, adults 60 and older went from making up 16% of homebuyers in 2009 to nearly 25% in 2019.
Since then, older Americans have continued to buy homes in sizable numbers — often driving up prices and beating out younger buyers in the process.
Older buyers have a leg up when they go head-to-head for a house on the market. Many have the advantage over first-time buyers of being able to cash in on the value of their existing homes. Baby boomers have been using the profits from the sales of their old houses to fund new homes that better fit their retirement ideal. Older buyers are also more likely to be able to do all-cash offers, which research shows helps house hunters seal the deal.
"Whether downsizing or moving to a new town, baby boomers being more active means competition that previous generations did not have when buying their first home,” Jeff Tucker, senior economist at Zillow said in the release. “Older buyers have the advantage of a lifetime's worth of savings and home equity to leverage in a competitive offer."
In 2009, the median homebuyer was 40. The median crept up to 44 as of 2019, before retreating to 43 in 2021, Zillow found.
The millennial generation is purchasing the most homes nowadays, with 37% of sales going to buyers ages 27 to 41. Gen X and baby boomers each constitute 25% of homebuyers. And the silent generation (those age 77 and above) is buying almost as many homes as Gen Z (ages 18 to 26).
Overall, the skewing of home purchases to older Americans is a concerning trend, given that homeownership is equated with the American Dream for many.
It hasn’t gone unnoticed. The White House wants to make the path to ownership smoother and more accessible for first-time homebuyers, and the Biden administration recently announced a series of measures meant to combat major obstacles to homeownership. They plan to increase the housing supply and expand financing opportunities.
But the obstacles for first-time and younger homebuyers are numerous. There’s a widespread housing shortage, particularly for so-called starter homes, as well as an increase in the share of homes being bought up by investors.
There are some pockets of hope, though. Zillow found that in some cities with cheaper housing, younger buyers were still making up high shares of home buyers pre-pandemic. In Buffalo, 57% of recent home buyers were between 18 and 39 in 2019, and in Salt Lake City 56% of houses in 2019 were sold to adults in the same age group.