"Boomers could be called the unlucky generation. Just as they entered the market hoping to buy their first homes, typical mortgage payments soared. Amid rampant inflation, home prices had shot up more than 60% in 4 years, and mortgage rates surged to their highest level in recent memory. The year was 1980, when rates topped 16% and the average monthly home loan payment jumped 34% from a year earlier.
Millennials, perhaps bitter over the economic havoc wreaked by the 2007 global financial crisis just as they entered the workforce, have long complained that “boomers had it easy.”
Houses were cheaper, jobs were plentiful, and college tuition could be paid off with a summer job, according to the common wisdom on Reddit.
But, according to our historical analysis, boomers arguably faced the toughest housing market ever for first-time buyers.
During the years when boomers turned 30, the share of median household income needed to make the typical mortgage payment averaged 33.2%, the highest of any living generation.
According to our historical analysis, boomers arguably faced the toughest housing market ever for first-time buyers.
In contrast, millennials on average faced the lowest mortgage burdens, thanks to a decade of ultralow interest rates following the Great Recession.
For millennials turning 30, the typical mortgage burden averaged just 22.5% of median income.
That’s lower than the 25.8% average mortgage burden faced by Gen X, and even edges out the 22.6% share paid by the silent generation, based on the available data. (The youngest millennials won’t turn 30 until 2026, and reliable mortgage rate data goes back only to the early ’70s, covering just the tail end of the silent generation’s first homebuying experience.)
If millennials had it easy, why didn’t more of them buy homes?
It is true that U.S. home prices have consistently outpaced inflation, for as far back as reliable data exists. In 2024 dollars adjusted for inflation using the consumer price index, median home prices averaged $193,429 over the years the silent generation turned 30, compared with $227,737 for boomers, $279,843 for Gen X, and $319,804 for millennials so far.
In other words, inflation-adjusted home prices grew 18% for boomers from the prior generation, 23% for Gen X, and 14% for millennials.
Despite this apparent advantage, it’s clear that many millennials did not buy homes by the same age their parents did. The median age of first-time homebuyers was 35 last year, up from 31 in 2013 and 29 in 1981, according to the National Association of Realtors®.
According to the Berkeley Economic Review, 45% of baby boomers were able to buy their first home between the ages of 25 and 34. As of 2019, only 37% of millennials in the same age range owned a home, the study found.
So if millennials had it easier in the housing market as the mortgage burden data suggests, why didn’t more of them buy homes?
For the oldest millennials, the very phenomenon that delivered ultralow interest rates as they turned 30, the Great Recession, also provided powerful incentives against homebuying, says David Clark, a professor emeritus of economics at Marquette University.
“They got to their 30s at the worst time possible for buying a home. You're coming out of the Great Recession, and you've got a pretty weak labor market as a consequence. They're saddled with some pretty significant college debt. And finally, this was not a smart time to buy a home, when prices were going down,” says Clark.
According to the Berkeley Economic Review, as of 2019, only 37% of millennials between the ages of 25 and 34 owned a home.
Although boomers didn’t have the same student loan burdens as millennials, many of them also entered the housing market during a period of high unemployment. The unemployment rate peaked at an all-time high (excluding the COVID-19 pandemic) of 10.8% in December 1982. Unemployment rates averaged 7% over the 1976 to 1994 period when boomers were turning 30."
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We have seen many Boomers helping their Millennial kids with down payment funds. Grandkids continue to be our best clients as people move to be near them or help them buy homes here in California.
If you are thinking about making a move out of state, be sure to talk to a good accountant who can navigate your individual situation.
It’s prime selling season and there are buyers in the market, looking for their new home!
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