The baby boomer generation, born between 1946 and 1964, is single-handedly revolutionizing the housing market. According to a recent report by the National Association of Realtors (NAR), the end of 2022 shows that boomers now comprise 39% of home buyers, up a staggering ten percentage points from 2021.

In contrast, millennials (born between 1981 and 1996) and Gen Z (born between 1997 and 2012) barely make a ripple, accounting for only 34% of buyers. You read that right; boomers make up more home buyers than millennials and Gen Z combined, and Gen X (born between 1966 and 1980) makes up only 24% of home buyers.

The trend may be a surprise since millennials have been the top group of home buyers since 2014, but this group dropped from buying 43% of the market in 2021 to only 28% in 2022. For real estate investors, property managers, and house flippers, this change in leadership can impact their portfolios. By understanding the shift, real estate investors can take steps to make the most of this new trend.

Boomers have had the good fortune to come of age during an unparalleled period of home price appreciation and low-interest rates.

Read on to learn more about boomers being back on top and what you can do to keep up with the trend.

Boomers Are Back, and They Call the Shots Now

After decades of raising families and building careers, boomers are now focused on themselves, and they’ve earned it. Boomers can expect to live significantly longer and healthier lives than previous generations, with some boomers living well into their nineties and beyond. Not only are they living longer, but boomers are more active and adventurous in their golden years than their parents and grandparents were. They aim to age as actively and stylishly as possible in homes tailored to their sophisticated tastes.

Boomer homebuyers are living large and willing to pay for it.

At the same time, boomers have had the good fortune to come of age during an unparalleled period of home price appreciation and low-interest rates. According to data from the St. Louis Federal Reserve, the median US home price has increased by more than 50% since 1990 alone. For boomers that have owned homes during these multi-decade bull markets, the wealth in their properties has compounded substantially. The median price in the mid-1960s, when boomers were buying their first homes, was only $20k. According to Redfin, the median house today is $368k. This gives boomers more financial leverage and bargaining power to trade up to luxurious, amenity-filled homes that meet their every need and desire during retirement.

Boomers Set the New Standard for Living

Boomer homebuyers are living large and willing to pay for it. According to NAR, boomers buy the most spacious homes at 1,900 square feet on average and pay the highest prices at $300,000 median. Nearly 28% buy new homes to gain state-of-the-art amenities and the latest technology without worrying about renovations or maintenance, meaning they value move-in-ready properties over fixer-uppers. Another 24% prioritize resort-style recreational facilities, like pools, gyms, clubhouses, and golf courses for an active lifestyle.

For a generation that came of age during the explosion of rock and roll, boomers sure have developed a taste for the high life. Their vision of paradise in retirement looks more like an oceanfront villa than a little beach shack. With their substantial equity, savings, and borrowing power, boomers have the means to live out retirement on their own terms in homes designed to provide the most comfortable golden years.

Younger generations face affordability challenges from higher living costs, limited inventory, and record levels of student debt.

Why Boomers Are Buying, and Buying Big, Right Now

Several factors have helped boomers climb to the top of the buying ladder. Here are the major drivers fueling boomer demand:

• Increased longevity and mobility. Boomers can expect to live 20-30 years longer than their parents, and the vast majority aim to make the most of it in an ideal home and location of their choosing.
• Lack of competition from other generations. Younger generations face affordability challenges from higher living costs, limited inventory, and record levels of student debt. Their inability or hesitation in buying creates opportunities for boomers. According to NAR, the share of first-time home buyers dropped to just 26% last year, the lowest level in decades. First-time home buyers comprised 34% of the previous year and 50% nearly a decade ago.
• Influence of COVID-19 pandemic. The pandemic has spurred many boomers into early retirement or remote work situations where their home lifestyle has become a higher priority. An increasing number of boomer buyers said COVID-19 was a factor in their decision to purchase a home, likely driving demand for more spacious or resort-style properties.
• Desire to downsize, relocate, or buy vacation homes. One-quarter of boomer homebuyers purchased for retirement living, 19% bought vacation or resort homes, and 14% bought for investment or income property. Boomers have the flexibility to choose houses for leisure and recreation or that enable an active adult lifestyle.

The growing population of older Americans is driving demand for independent living, assisted living, and continuing care retirement communities tailored to active adults.

How Investors Can Capitalize on the Boomer Housing Boom

The boomer generation is not just transforming the housing market but redefining retirement living. Real estate investors who position themselves at the forefront of boomer housing trends stand to benefit. Here are some suggestions to tap into this lucrative market:

• Target boomer buyers in all marketing. Highlight low-maintenance, accessible, tech-enabled, and energy-efficient features tailored for boomer lifestyles. Focus on recreation, amenities, and communities enabling a lavish retirement. Sell a comfortable and social lifestyle, and the boomers will come.
• Renovate or build properties suited to boomer living. Make upgrades to enhance curb appeal, flooring, bathrooms, kitchens, storage, outdoor living, and smart home automation. Properties suitable for multi-generational living or with resort-style amenities may also appeal to many boomer segments. While younger generations may be okay doing some work to upgrade a property, boomers want to move in and start living.
• Diversify investment types and locations. Offer single-family homes, townhomes, condos, co-ops, and vacation properties in locations from urban to resort areas. Provide options for all-cash luxury buyers and those seeking conventional or reverse mortgages. While many boomers look for luxurious properties to spend their retirement years, not everyone wants to live on the beach. Many want to move closer to friends and family, which could mean ending up just about anywhere.
• Become an expert in boomer buyer trends. Thoroughly educate yourself on the diverse interests, priorities, and homebuying motivations within the boomer generation. Help boomers find or develop their ideal living situation to experience retirement on their own terms.
• Consider senior living facility investments. Senior housing offers opportunities for investors interested in commercial properties or expanding their portfolios. The growing population of older Americans is driving demand for independent living, assisted living, and continuing care retirement communities tailored to active adults.

Investors catering to boomers’ appetite for luxury living in tech-savvy, amenity-rich homes will earn excellent returns.

This Is Not Your Grandparents’ Retirement

The boomer generation is reinventing retirement and the housing market along with it. At nearly 40% of today’s home buyers, boomers are transforming the market to suit their adventurous vision of aging. They demand low-maintenance yet high-tech homes in resort-style communities that reject outdated stereotypes.

Freed from work and family life, boomers finally view their golden years as an opportunity for vitality, indulgence, and reinvention. With a desire to live closer to their social networks and the cash to make a move in this competitive market, boomers are creating new opportunities for real estate investors.

Investors catering to boomers’ appetite for luxury living in tech-savvy, amenity-rich homes will earn excellent returns. It just takes paying attention to the trends and marketing the right amenities to the generation cornering the market.