Housing market sees generational shift: "Plot Twist" (2025)

Baby boomers have overtaken millennials as the largest group of homebuyers in the United States, according to a new report.

Older Americans are predominately leveraging cash to purchase homes, while millennials still need to rely on mortgages.

Why It Matters

The return of boomers, the generation born between 1946 and 1964, to the top of the buyer demographic signals a changing dynamic in housing competition. Cash buyers, largely boomers, are outmaneuvering younger bidders who are reliant on loans, a pattern that's reshaping who can realistically enter and succeed in the housing market.

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What To Know

According to the National Association of Realtors' 2025 Home Buyers and Sellers Generational Trends Report, 26 percent of younger boomers and 16 percent of older boomers were homebuyers, compared to 12 percent of younger millennials and 17 percent of older millennials.

While millennials still represent a large share of first-time buyers, their purchasing power is being challenged by economic pressure. As of 2024, the median age of a homebuyer rose to 56, compared to 31 in 1981. That rise tracks with increasing home prices and borrowing costs.

One of the starkest divides in buyer behavior lies in financing. More than half of older boomers paid for homes entirely in cash. Among millennial buyers, more than 90 percent required mortgage financing, according to the National Association of Realtors' 2025 Home Buyers and Sellers Generational Trends Report.

"In a plot twist, baby boomers have overtaken millennials – the largest U.S. population – to become the top generation of home buyers," Jessica Lautz, NAR deputy chief economist and vice president of research, said in an April 1 press release. "What's striking is that half of older boomers and two out of five younger boomers are purchasing homes entirely with cash, bypassing financing altogether."

What People Are Saying

Kevin Thompson, the CEO of 9i Capital, told Newsweek: "We've got nearly 10,000 people turning 65 every single day in this country. That means a large portion of Boomers are sitting on significant home equity. Many are downsizing or moving into retirement communities, often coming to the market with cash in hand, which gives them a clear advantage."

Title and escrow expert Alan Chang told Newsweek: "Real estate is likely going to be the largest purchase in the average American's lifetime."

"Increased appreciation over the last 5 years has put real estate out of reach for many, however, it has also created an amazing opportunity for those already in the market to build equity at an unprecedented rate. This allowed generations of established homeowners to be able to sell and purchase as an all-cash transaction, often beating contracts with loan contingencies."

Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: "This data shows just how unattainable the dream of home ownership has come for multiple generations of younger Americans. Millennials in many ways are trapped at the moment, with most of their income being gobbled up by a higher cost of living. At the same time, Baby Boomers who saved over the decades and paid off their initial housing purchases can hop to new properties without having to finance."

What Happens Next

Economists anticipate that mortgage rates will stay above 6 percent throughout 2025, with only modest declines expected. This persistent high-rate environment continues to challenge affordability, particularly for first-time and younger buyers.

"Boomers have more capital. Millennials and younger buyers are far more reliant on financing. That's not surprising since Boomers have simply had more time to build wealth. It also reflects a broader reality: the majority of assets in this country are still held by older generations," Thompson said.