Empty nesters are holding on to their big homes
Baby boomer households without children own nearly 3 in 10 homes with 3+ bedrooms — millennials with children own half that amount.
- A report from Redfin found that the share of empty nest boomers in large houses has increased in the last decade.
- Despite potentially needing more space, millennial households with children own less than 15% of homes with three or more bedrooms.
- Don’t expect to see a flood of inventory from boomers downsizing, the report said, as older homeowners don’t have much financial incentive to do so.
Older homeowners aren't in a hurry to downsize, according to Redfin's latest report.
By analyzing the most recent census data (from 2022), Redfin researchers found that, for years, baby boomers have outnumbered other generational cohorts when it comes to ownership of large homes.
According to the report, empty nester boomers own more than 28% of "large homes," or homes with three bedrooms or more. That percentage is cut in half for millennials with children, who own just 14.2% of these homes. Gen Zers with kids barely measure at just 0.3%. This means that nearly half — or 45.5% — of one-to-two-person boomer households own large homes, the report found.
No incentive to sell
Being at the tail-end of their careers, baby boomers — those between the ages of 60 and 78 in 2024 — have the most wealth of any generation, and many live in paid-off homes. According to Redfin's report, 54% of baby boomers who own homes own them free and clear, bringing their monthly cost of ownership down to just $612 on average — largely to cover property taxes and insurance.
Baby boomers who own their homes outright have little incentive to sell and move, particularly with home prices being so high and mortgage rates being as volatile as they have been. In many cases, boomer homeowners would be in a worse position financially should they sell a paid-off home and take a mortgage on a smaller home at 7%.
Boomer generation has consistently owned bigger homes
More than a decade ago, empty nesters of the older "silent generation" — those aged 67-84 at the time — owned a relatively small share of large homes: just 16%. Gen Xers, who were 32-47 years old during that era, owned 19%. But baby boomers, who were between 48 and 66 years old in 2012, were well above these other generations even then, owning more than 26% of larger homes.
Fast forward to 2022, baby boomers also accounted for a much larger share of home purchases than millennials, even though boomers represented a smaller generational cohort. Affordability — a struggle for millennials — and equity, which boomers are more likely to have, factored into the disproportionate share of older buyers.
Where does this leave millennial buyers?
Empty nester boomers choosing to stay in their large home could be contributing to the current inventory imbalance. And low inventory means higher prices for existing homes. The affordability crunch has caused millennials to either delay or put off their plans to purchase a home entirely.
"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," said Redfin Senior Economist Sheharyar Bokhari.
However, millennials should consider new construction, Bokhari suggested, as almost all newly built homes are three bedrooms or greater, and many builders are still offering incentives like mortgage rate buydowns and free upgrades.