June 20, 2019
What the Baby Boomer Generation Looks for in a Housing Market
On the national stage, the Baby Boomer generation—those Americans born between 1946 and 1964—was long ago eclipsed in the housing market in terms of raw mortgage origination numbers by the Generation X and Millennial generations. In 2018, while Millennials took on 45 percent of new mortgages, and Gen X took on 36 percent of them, the Baby Boomers took on only 17 percent. After all, they have already gone past their peak earning years, and many of them have settled into forever homes. But when they do purchase homes, perhaps unsurprisingly, as a group they make down payments that tend to be larger by percentage than those made by either Gen Xers or Millennials, they care less about affordability, and they largely favor new mortgages in states with low property taxes. This according to the latest Generational Propensity Report released by Realtor.com.
Of these three generational groups, the relatively few new mortgages taken by Boomers tend to fall in the middle—with a median price of $264,000, as compared to the $238,000 paid by Millennials and the $289,000 paid by Gen X. Yet their down payments tend to be larger by percentage—17.7 percent, over Gen X’s 11.9 percent and the Millennials’ 8.8 percent—owing mainly to the equity they have managed to build up over the years in previous homes. And precisely because of this, though they are buying more expensive homes than Millennials, the average mortgage balance for Boomers tends to be lower—meaning they will likely pay less in interest (and total) over the lifetime of their loans.
The report also put forth a generational “score” for geographic markets—calculated by comparing the “current share of mortgages issued to each generation and the change in that generation’s share of the market from last year.”
The top ten markets for this set by score, in which the average tax burden was only 7.9 percent as compared to the national average of 8.8 percent: Knoville, TN (score: 0.94); Sacramento–Roseville–Arden-Arcade, CA (0.92); Memphis, TN-MS-AR (0.87); Oklahoma City, OK (0.81); Riverside-San Bernardino-Ontario, CA (0.8); our service area of Miami-Fort Lauderdale-West Palm Beach, FL (0.8); Atlanta-Sandy Springs-Roswell, GA (0.75); San Antonio-New Braunfels, TX (0.75); Phoenix-Mesa-Scottsdale, AZ (0.75); and Raleigh, NC (0.73).
If you are a Boomer looking to buy a home in Miami, Fort Lauderdale, or West Palm Beach, Florida, give us a call. At Topouzis & Associates, P.C. we utilize our considerable expertise ensure our clients are conveying and purchasing property title clear of judgments and defects. We also help our clients put into place a good policy of title insurance to make certain they don’t get surprised by any nasty lurking issues with a property. Contact us if you’d like us to do this for you.