While most home buyers still get a loan to buy a home, about half of Baby Boomers are forgoing financing altogether, often using home sale proceeds to buy their next one.
“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,” said Jessica Lautz, deputy chief economist and vice president of research at the National Association of Realtors.
Overall, 74% of recent buyers financed their home purchase, according to data released by the National Association of Realtors. More than 90% of buyers 44 years and younger financed, while only 49% of Older Baby Boomers (1946-1954) and 41% of the Silent Generation (1925-1945) financed their home.
“Older millennials are buying bigger and newer homes with larger down payments than their younger counterparts,” Lautz added. “This shift reflects the increasing role of equity in enabling repeat purchases, especially among older generations, while younger buyers continue to face affordability challenges.”
Overall, 49% of buyers said their down payment came from savings. About 45% of comparable down payments came from the proceeds from the sale of a primary residence.
Among Younger Millennials (1990-1998), 71% used savings for their down payment. For Older Millennials (1980-1989), it was 60%. For Older Boomers (1946-1954), it was 37%. And for the Silent Generation (1925-1945), it was 35%.
Older buyers were most likely to use equity from a past home, according to the data. Younger Millennials used gifts or loans from friends and family more than any other generation.
Some 12% of all buyers cited that saving for a down payment was the most difficult step in the home buying process. This share was 33% for Younger Millennials (1990-1998) compared to only 1% among Older Baby Boomers (1946-1954).
NAR defined the generations used in the report as follows: Silent Generation is from 1925-1945; Older Boomers is from 1946-1954; Younger Boomers is from 1955-1964; Gen X is from 1965-1979; Older Millennials is from 1980-1989; Younger Millennials is from 1990-1998; and Gen Z is from 1999 to 2011.
