In a tight housing market, millennials and boomers are in competition
A MARTÍNEZ, HOST:
Swing by an open house for a mid-size home these days, and you'd probably see buyers from two different generations sizing each other up. With so few properties for sale, millennials and baby boomers are often competing for the same homes. Here's NPR's Arezou Rezvani.
AREZOU REZVANI, BYLINE: Michael Chen and his family have been hunting for a home for a while.
MICHAEL CHEN: I think we've been looking for somewhere between three and four years.
REZVANI: The 39-year-old health care consultant lives in Rochester, N.Y., with his wife and two kids. Chen wants a house where he can comfortably host his parents, where there are also better public schools. But he's been up against a lot in recent years. First, it was the high home prices, then the climbing mortgage rates. And lately there's been another big challenge.
CHEN: It's funny. I think it's sort of become a recurring pattern. We go to these open houses, and we often see folks, like, our parents' age. So I guess boomers.
REZVANI: Those boomers, they've also taken notice.
JANE WILSON: You know, we're two different generations, and yet we're finding ourselves in the same places at the same time wanting the same thing.
REZVANI: That's 71-year-old Jane Wilson. She and her husband, who are both retired teachers, are in the market for a home in Hawaii.
WILSON: We're tired of a paddle board behind the sofa, golf clubs in the entry. And we don't really have room for our grandchildren to come over and visit us while we're here.
REZVANI: Millennials, like the Chens, have hit their peak homebuying years later in life, at a time when many boomers, like the Wilsons, are living longer and also moving later, says Jessica Lautz of the National Association of Realtors.
JESSICA LAUTZ: I do think that speaks to people, outside of COVID, being healthier later in life and being active and wanting to purchase a home at a time where, historically, we may have seen people staying in place or moving into family members' homes or a retirement community, but not purchasing a primary residence.
REZVANI: These shifting timelines have brought the two generations head to head, and with the supply of homes so scarce and the prices still high, millennials like Chen have had a hard time competing.
CHEN: I'm going up against people who have had 20, 30, 40 years of professional experience and life savings and retirement savings. I would say probably they have more to draw on than I do.
REZVANI: Longtime homeowners can wield the equity they've built over decades in ways millennials typically can't. They can often clear the competition with all-cash offers. And it doesn't stop there, says Florida-based real estate agent Christina Goldstein.
CHRISTINA GOLDSTEIN: They've got a lot of power in that cash. They can waive all of the contingencies. We don't want an inspection. We don't want an appraisal. We don't care if it needs flood insurance 'cause they're not being required by a mortgage company or a lender to have all of those things in place.
REZVANI: This competition does sometimes turn into collaboration. Nearly a quarter of millennials who do buy a home get help from the bank of mom and dad, who are often boomers. For young homebuyers who can't depend on that kind of intergenerational wealth, it's a steep hill to climb, though not impossible.
CHEN: We're doing a final walkthrough tomorrow and closing on Friday. And so - (laughter).
REZVANI: The Chens did finally find their home. Their yearslong search gave them time to save for a greater down payment. They also took a page out of the boomer playbook and waived some inspections. As for the Wilsons, to buy their next home they'll also be selling, and they have one request for their agent.
WILSON: Can we avoid the person who comes in with that cash offer right away and sell to a young family? We'd really like to do that.
REZVANI: And there's no shortage of young families who'd welcome it.
Arezou Rezvani, NPR News, Los Angeles. Transcript provided by NPR, Copyright NPR.