As baby boomers look to downsize out of their suburban McMansions, a generational showdown is looming: Millennials might be coming into their own as the nation’s biggest group of first-time home buyers, but they aren’t exactly lining up with bids in hand for those large, expensive homes in the sleepier suburbs. Instead, they’re looking for a different kind of home—the same ones, in fact, that the empty nesters are looking to buy.
It’s a battle of the millennials vs. baby boomers playing out in the nation’s suburban housing markets.
Younger and older generations alike are gravitating toward smaller dwellings in more urban, walkable suburbs and cities, with restaurants and coffee shops around the corner. It’s leading to a real estate traffic jam: Increasingly, boomers are getting stuck, because most can’t buy the home of their dreams until they unload their current ones. And many millennials have neither the desire nor the means to help them out.
“What you have is everyone chasing the same type of home,” says Rick Palacios, director of research at John Burns Real Estate Consulting. “More and more buyers of all ages want to avoid having to deal with a huge yard and all the upkeep and the costs to maintain [a larger] home.”
It’s creating an odd imbalance in a real estate market—a disruption to what has long been considered the traditional generational housing life cycle. And it’s leaving many would-be buyers out in the cold.
Millennials seek a new kind of suburban community
There’s no question that millennials are moving to the suburbs. About 57% of buyers 36 and under closed on homes in the suburbs last year, compared with just 15% of those who became homeowners in cities, according to research from the National Association of Realtors®. But their vision of suburban living differs from the sprawling domains of the boomer generation.
For one thing, many younger Americans are reluctant to gi