There are a lot of headwinds for first-time homebuyers these days. Report after report shows that younger Americans are grappling with stagnant wages, record-high student debt, and rising costs of living. As a result, many struggle to save for a down payment or qualify for a mortgage.
Add the impact that older homeowners are having on the housing market and it’s no wonder millennials are in a funk. Many sense that the American Dream is slipping away and that they’re being locked out of a housing market that treated their parents very well. They’re not wrong.
The U.S. Census Bureau reports that over half of all homes in the U.S. are now owned by Americans over the age of 55, and baby boomers—Americans aged 61 to 79 this year—own 37% of all U.S. homes.
And they’re not going anywhere. A recent Redfin-Ipsos survey found that 78% of Americans over the age of 60 want to remain in their current homes—and 43% say they will never sell their homes. So first-time buyers are entering a market with low inventory, high prices, and intense competition for the few homes that are available.
When older Americans do sell, either due to health reasons, downsizing, or mortality, millennials are in for another challenge. A report by Leaf Home, a home improvement company, found that 73% of baby boomers live in homes that were built in 1980 or earlier and have never been
renovated.
So as inventory slowly opens up, many millennials will face a difficult choice: either compete to buy a renovated home that is out of their price range or buy a fixer-upper that requires extensive updating. Either way, they likely face decades of strained budgets as they chase their version of
the American Dream.
There is some good news for local homebuyers. Colorado’s population skews young with the nation’s third-lowest concentration of baby boomers at 34.9%. Only Texas and Utah are lower, at 33.6% and 29.8%. So though inventory remains tight and economic factors are always a challenge, first time buyers in Colorado at least have the advantage of shopping in a market dominated by a younger demographic that is statistically likely to sell sooner rather than later.