The decision worked out well. That house sold for $480,000, giving the Zinnicks a windfall. They found a more manageable, one-story home in Oklahoma for $275,000 that was close to their family. And for the first time in their lives, they paid all cash, dodging soaring mortgage rates.
“This move was meant for us,” said Laura Zinnick, 77. “I’m so glad we’ve been able to buy this house later in our life.”
Lately, grandparents have been edging out younger buyers who are struggling to get into the market for the first time. Nowadays, first-time buyers make up 32 percent of the market, well below an average of 38 percent since 1981, according to NAR. They’re also more likely to be in their mid-30s today, in contrast to their late 20s in the early 1980s.
The result is yet another quirk of the post-covid economy, and in particular, a housing market that has proved remarkably strong. As the Federal Reserve hoisted interest rates to 22-year highs, the widespread expectation was that a subsequent spike in mortgage rates would zap buyer demand. But even while the 30-year fixed-rate mortgage approaches 8 percent, the housing downturn was short-lived.
And in the meantime, a new picture is emerging of the buyers who still find a way to get a house: They’re older, and because many of them sold a home before buying, they’re also wealthier.
“We are still talking about an incredibly difficult market for first-time buyers to enter, even if there’s slightly less competition,” said Jessica Lautz, the deputy chief economist at NAR. “If there’s a multi-offer situation, an all-cash buyer or someone who has a lot of equity is likely to win. And that person is going to be older.”
There are many reasons. For starters, older buyers are also likely to be selling a house, which provides them fresh cash. Indeed, the typical home seller was 60 years old in 2023, according to NAR, the same as last year.
And with so few homes available, sellers often go with the potential buyer making the most attractive offer - be it a large down payment, stellar credit or all cash. There, too, older buyers have a leg up.
Jennifer Dodds sees that dynamic in the Houston area, where the median sale price has jumped from around $275,000 to $325,000 in the past three years, according to Redfin. As a real estate agent working primarily with seniors, Dodds focuses on helping older buyers find their next homes, and she’s often scouring for one-story houses that work best for shoppers who are downsizing but aren’t yet looking to move into assisted-living centers or senior communities. (According to NAR, 70 percent of recent buyers did not have children under the age of 18 in their homes, the highest share recorded, and well above 42 percent in 1985.)
Gone are the days of out-of-control bidding wars, which defined the market during the pandemic. But Dodds said there still can be a clear advantage for older buyers who have built up their wealth and income over decades and routinely emerge at the top of the pack. (...)
All the boomer buyers are keeping housing inventory - which wasn’t plentiful to begin with - even tighter.
by Rachel Siegel, The Washington Post/ADN | Read more:
Image: Matt Rourke/AP
[ed. Another example of why ageism is so persistent (see below). But, on another level, why do developers keep building expensive McMansions when there's clearly a huge market for mid-level homes? Probably for the same reason they keep building massive SUV's and pickups (that cost more than some mid-level homes) - because society's wealth inequities encourage it. Plus. America. Bigger is always better (fives acre homesites, one acre lawn, four acres weeds).]
