Property wealth gap between boomers and millennials laid bare: Value of US homes hits record $47 trillion – but vast majority belongs to older homeowners

Baby boomers have amassed $18 trillion in real estate — more than three times as much as millennials, new figures show.

The total value of US homes reached a record $47 trillion this summer after recovering dramatically from a $3 trillion loss between June 2022 and February this year.

Data from Redfin shows that the lion’s share of this wealth is held by the baby boom generation – those between the ages of 55 and 77 – and Generation X, who are between the ages of 43 and 55. These two cohort accounts have combined assets of $31.4 trillion.

By comparison, millennials, now aged between 27 and 42, own only $5 trillion in real estate. But the generation had seen the biggest gains in property, as the total value of their homes rose 2.9 percent over the past year.

Experts say this is due to the fact that more than 60 percent of homes bought with mortgages in recent years have been paid for by millennials.

It means millennials now own more property than the “silent generation” — those between the ages of 77 and 95.

This cohort has $4.7 trillion tied up in real estate, after falling 11.7 percent over the past year. The decline was attributed to the fact that many homeowners of this age had died or moved into retirement homes.

Redfin analyzed data on more than 90 million US homes to generate the report. Researchers compared home values ​​between June and last year, though the data is subject to revision.

The report also found that millennials lost 18.2 percent of their home equity in the first quarter of the year compared to the previous quarter.

Redfin Economic Research Lead Chen Zhao said millennials bought products like home equity lines of credit (HELOC) to pay off credit card debt and student loans.

There is plenty of speculation that the US real estate market is on the verge of a major downturn due to rising interest rates, pushing the average 30-year fixed-rate mortgage to just under seven percent.

The average deal on a 30-year mortgage has remained above 6.5 percent since late May, but the latest rate is the highest since November

Data from government-backed lender Freddie Mac shows the average interest rate on a 30-year, fixed-rate mortgage is now 6.96 percent — more than double what it was two years ago

But Zhao said the fact that most Americans closed on 30-year deals when rates were low meant many didn’t want the move. This has limited available housing on the market, limiting supply – offsetting a simultaneous drop in demand.

“The dominance of the 30-year fixed-rate mortgage in America supports home values,” she said.

“Tons of homeowners have scored an incredible deal during the pandemic: a 3% mortgage on the remainder of their 30-year loan.

‘Now they stay put, because moving would mean paying twice as much.

“This means that buyers who are in the market now are fighting it out for a very small number of homes, preventing home values ​​from falling.”

Redfin’s research shows that luxury homes lose value, but homes valued between $250,000 and $750,000 made gains.