Nearly half of all baby boomers in the United States would not have been able to afford their current home if they had to buy it in today's housing market, according to a report.
Nearly two in every five homeowners, or 38%, don't believe they could afford to buy their current home if they were to buy it today. Broken down by generation, 45% of baby boomers said they would not be able to afford a home in their neighborhood today. In comparison, only 39% of Gen Xers and 24% of Gen Z and millennial homeowners said they could not afford their current home if they were to buy it today.
That is according to a survey conducted by Qualtrics and commissioned by real estate firm Redfin. Conducted in February 2024, the survey analyzed the answers from 1,988 respondents who said they were homeowners.
Why Homeownership Is Also Out of Reach for Many Baby Boomers
The survey's findings stand to reason, as many baby boomers likely bought their homes years ago when prices were much lower. That being said, mortgage rates were much higher then, according to data from the Federal Reserve.
In addition, baby boomers who bought their homes during the pandemic had mortgage rates that were much lower. In December 2020, mortgage rates hovered in the 2% range. Now, the average 30-year fixed mortgage rate is 7.1%, and the median sales price for homes in the U.S. is $420,357 as of March.
"Rising home prices are a double-edged sword. On the one hand, Americans who already own homes benefit from rising values and they can consider themselves lucky they broke into the housing market while they could still afford it. On the other hand, price appreciation makes the prospect of buying a new home daunting or even impossible for many people who want to move," Redfin Senior Economist Elijah de la Campa said in the analysis.
This situation has led to a shortage of supply in the housing market as many baby boomers opt to stay in their homes instead of downsizing for retirement.
READ MORE: Over 70% of Baby Boomers Have No Plans of Selling Their Homes Anytime Soon: Redfin
