Empty-nesters own twice as many large homes as millennials with children

Empty-nester baby boomers own roughly twice as many of the nation’s three-bedroom-plus homes as millennials with children, according to a report from Redfin published on Tuesday.

The report is based on a Redfin analysis of U.S. Census data from 2022, that breaks down the share of three-bedroom-plus homes owned and occupied by each generation, by household type and size. The report defines “empty-nester” as a household headed by a baby boomer with one to two adults living in the home.

According to the report, empty-nest baby boomers own 28.2% of the three-bedroom-plus homes in the country, while millennials with children own just 14.2%. This disparity comes even as more millennials (28%) than baby boomers (27%), make up the adult population of the U.S.

Just 3% of Gen Zers with children own three-bedroom-plus homes.

In addition to the nearly 30% of empty-nest baby boomers who own large homes and addition 7.5% of baby boomers with a household of three adults or more own three-bedroom-plus homes.

Redfin attributes these divides to a variety of factors, the most salient of which is that over half (54%) of baby boomers who own homes have no mortgage and those who do have a mortgage have a much lower interest rate than the rate they would end up with if they sold and bought today. This gives baby boomers very little incentive to sell.

This has put a strain on the inventory of three-bedroom-plus homes, making it harder for a millennial to buy one. Younger generations have also faced rising affordability challenges, as home values have risen four times faster than incomes of the last several decades, according to Redfin, which has made it harder for both millennial and Gen Z buyers to purchase a large home as they are less likely to have equity from the sale of a previous property.

The report also noted that a recent Redfin survey found that 12% of millennials believe they’ll never own a home and aren’t interested in homeownership, and 7% said they don’t plan to buy because they don’t want to maintain a home.

“There’s unlikely to be a flood of large homes hitting the market anytime soon,” Sheharyar Bokhari, a senior economist at Redfin, said in a statement. “Logically, empty nesters are the most likely group to sell big homes and downsize: They no longer have children living at home and don’t need as much space. The problem for younger families who wish their parents’ generation would list their big homes: Boomers don’t have much motivation to sell, financially or otherwise. They typically have low housing costs, and the bulk of boomers are only in their 60s, still young enough that they can take care of themselves and their home without help. Still, some boomers are ready to downsize into a condo or move somewhere new for retirement, and the mortgage-rate lock-in effect is starting to ease–so even though there won’t be a flood of inventory, there will be a trickle.”

Although millennials with children own less than 15% of all three-bedroom-plus homes in the country, they make up 42.8% of all the three-bedroom-plus rentals nationwide, the largest share of any generational category. Another 17% of millennials, regardless of it they have children or not live with a family member in a home that the family member owns or rents, while 10% live in a home owned or rented by a non-family member.

The study also found that ownership disparity of three-bedroom-plus homes has increased over the past decade. In 2012, empty nesters of the silent generation (who were between the ages of 67 and 84 at the time) owned just 16% of three-bedroom-plus homes, while Gen Xers (who were 32 to 47 at the time) with children owned 19% of those larger homes.

Nationwide, the report found that empty nesters own at least 20% of large homes in any given metro area, with the largest shares in Pittsburgh, Pa. (32.1%), Birmingham, Ala. (31.1%), and Cleveland, Ohio (30.8%).

Riverside, Calif. (21.9%), Salt Lake City (22%), and Austin (22.2%) have the smallest share of three-bedroom-plus homes owned by baby boomers.

In contrast, millennials with children own no more than 18% of the three-bedroom-plus homes anywhere in the country, with the largest shares being in Cincinnati, Ohio (17%), Kansas City, Mo. (16.5%), and Riverside, Calif. (16.5%), and the smallest shares in Los Angeles (9.4), San Jose, Calif. (10.4%), and San Francisco (10.9%).