Millennials Want to Buy Homes -- but Boomers Are Scooping Them Up

Younger home buyers have stiff competition in today's housing market.

Today's housing market is a really tough one to navigate. There aren't enough homes available for sale to meet buyer demand, so bidding wars are becoming all the more common as people duke it out for limited properties.

Not surprisingly, millennials remain interested in buying homes, reports Zillow. But they're facing increasing competition from a surprising source -- baby boomers. In fact, Zillow says younger buyers now make up a smaller share of the real estate market than in previous years, which suggests that these buyers are being crowded out by repeat buyers, including boomers.

Why do baby boomers have an edge in the housing market?

Many millennial home buyers are also first-time buyers, which means they don't have the same financial resources at their disposal as older buyers.

Boomers, for example, are more likely to already be homeowners and may be able to tap their home equity to buy additional homes. Millennials, by contrast, may be reliant on the money they've scraped together in savings for a down payment.

All told, the share of recent home buyers between the ages of 18 and 39 fell 13% between 2009 and 2019. At the same time, the share of recent buyers who are 60 and older rose 47% during that same time frame.

How millennial buyers can increase their chances of success

Baby boomers might have an edge over their younger counterparts due to being more financially stable or having home equity already that they can use to their advantage. But that doesn't mean millennials can't increase their chances of success in today's tight housing market.

For one thing, millennials can look at up-and-coming neighborhoods. Home prices tend to be more affordable in transitional neighborhoods, and boomers may not have the same appetite for them.

Secondly, millennials may be more willing to go out and get side hustles than their older counterparts. That income boost could really help level the playing field. In today's housing market, home prices are really inflated due to low supply and high demand. It takes a higher down payment than in previous years to qualify for a mortgage. But savvy millennials are in a great position to capitalize on the gig economy and put themselves in a stronger position to buy.

This isn't to say that baby boomers can't go out and get a side gig, too. But it's more common to see younger workers uphold this practice.

Millennials were facing their share of challenges on the road to becoming homeowners before home prices started to soar. Many were grappling with high levels of debt that made taking on a mortgage even more difficult. Now, millennials are grappling with sky-high home prices, limited inventory, and older buyers as competition. But millennials are also a resilient and creative generation, and in time, they could grow to constitute a larger share of home buyers.

Also, as millennials become more established in their careers, their earnings could increase. That could open the door to many more future buying opportunities.