Baby boomers dominate America's housing market. But as they age out, millions of homes will be up for grabs, and Gen Z is poised to benefit.
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00:00 Baby boomers dominate America's housing market.
00:03 They own $19 trillion worth of real estate.
00:07 It's $5 trillion more than Gen Xers own,
00:10 and it's double the amount that millennials own.
00:13 I'm Leila Maiden, and I cover all things money and investing.
00:17 In the 1960s and '70s,
00:19 we had a home builder boom,
00:20 and so it created a lot of supply on the market.
00:23 By the age of 30,
00:25 many baby boomers or half of them owned their own home.
00:28 But a lot has changed since then.
00:30 The gap between income and the price of a home
00:33 has only widened over time.
00:35 It means that housing is less affordable.
00:38 Now, on the flip side of that equation,
00:40 millennials came into the economy at a tough time.
00:43 They graduated, many of them in 2008,
00:46 right at the height of the financial crisis.
00:48 They were coming out with student debt,
00:50 jobs were really difficult,
00:51 and things just weren't the same as they were before.
00:54 So the consequence of that is millennials had to delay
00:57 a lot of big milestones that baby boomers could get to,
01:01 for example, buying your first home.
01:03 To put things into perspective,
01:05 at the age of 40, 69% of boomers already owned their home.
01:09 In contrast, only 62% of 40-year-old millennials
01:13 owned their home.
01:14 Obviously, Gen Z is not 40 yet,
01:16 but data shows they're already in a better position,
01:19 with 30% of 25-year-olds owning their home.
01:23 But things could be changing soon,
01:25 and it could be a big shift,
01:27 because baby boomers are aging.
01:29 And as they move on to nursing homes or granny flats,
01:32 or eventually pass away,
01:34 there's gonna be a lot of real estate
01:35 that's gonna be up for grabs.
01:37 And this is what real estate experts
01:39 call the silver tsunami.
01:42 In 2019, Zillow estimated that 25% of owner-occupied homes
01:47 could hit the market in the next 20 years.
01:50 That's 20 million homes.
01:51 We can expect boomers to begin aging out of their homes
01:54 around 2030, after they reach 80 years old.
01:58 So who's expected to benefit from this surplus of supply?
02:02 Well, it's probably gonna be Gen Z-ers.
02:05 So by the time we get to 2030,
02:07 Gen Z-ers will be in their early 30s,
02:09 which is the prime age for buying your first home.
02:13 Millennials, on the other hand,
02:14 well, the older ones, they'll be 49 years old.
02:17 And buying a home that late in life
02:18 means you could end up with a mortgage
02:20 in your retirement years.
02:22 But it's not that black and white,
02:24 because the real estate market is wildly unpredictable.
02:27 But the excess of homes doesn't mean
02:30 that home prices are going to drop.
02:32 Not necessarily.
02:33 There are other factors
02:35 that we also need to take into consideration.
02:37 The first of which is that, well,
02:39 the aging process for a generation is slow and gradual,
02:42 and it might give demand time to catch up
02:44 and meet that excess supply.
02:46 Another possibility is that boomers
02:48 may pass some of these homes on to their kids.
02:51 And let's think when home prices are down too low.
02:54 You might not want to put your house for sale, right?
02:57 Instead, you could maybe keep it
02:59 and rent it out for that extra cash flow.
03:01 And then where are these homes?
03:03 Are they located in areas
03:05 where the younger generations will want to live?
03:07 And what are the conditions of these homes?
03:09 Many of them may need to be renovated,
03:11 and that in itself is going to be costly.
03:14 And then I spoke to a housing economist
03:16 who brought up a point that I hadn't even thought about.
03:19 There's an increasing amount of investors
03:21 that are competing for homes.
03:23 That means that demand can catch up with supply
03:25 and even outpace the supply.
03:27 Boomers have really shaped the real estate market
03:30 as we know it, and they may shape it one last time,
03:34 except this time, it could be Gen Zs
03:37 that will be the beneficiaries of that.
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