How Rich Are the Baby Boomers?

I don’t know if this is my finance brain at work or just hitting middle age but anytime I travel now there invariably comes a point where I pull up home listings in the area on Zillow to get a sense of the local housing market.

My family was in Marco Island, FL last week for spring break so of course I had to do some channel checks on housing prices in the area:

Two things stand out here:

(1) There are tons of listings in the area, especially when you consider how tight the housing supply is for the housing market at large in this country. That surprised me.

(2) Holy crap are the prices expensive. There are no price filters in this search. Basically, all of the listings on the island were 7-figures. Granted, Marco is a very nice area and the real estate market in Florida has been on fire but I was taken aback to see the average home is selling for somewhere in the $1.5 to $3 million range.

Since Florida is home to a lot of retirees and old people, the only logical conclusion I could form from this exercise is that baby boomers are LOADED.

The people selling the houses for millions are boomers sitting on huge gains while the people buying the houses (and tearing them down to build even bigger houses in many cases) are wealthy boomers who can afford multi-million homes.

Millennials are in their prime household formation years but it’s the boomers who are the ones in the catbird seat when it comes to the housing market right now.

Boomers have a homeownership rate of nearly 80% and many of them have their houses paid off.1 You don’t need to worry about 7% mortgage rates when your house is paid off and you can use that equity to fund your next purchase.

According to the National Association of Realtors, baby boomers were the largest share of homebuyers last year for the first time since 2012. They accounted for 39% of all home purchases (up from 29% the year before) while millennials bought 28% of houses last year (down from 43% the year before).

Owen Stoneking notes there were more homes purchased with all cash last year than by first-time homebuyers.

When you look at the generational wealth divide, boomers do hold the bulk of the net worth in the United States:

As of year-end 2022, that’s more than $73 trillion for boomers, with a little more than $40 trillion for Gen X and just $8 trillion for millennials.

Here’s the breakdown by percentage share:

To be fair, millennials are doing just fine compared to previous generations at the same stage of their lives. And the forgotten generation (Gen X) is coming on strong.

However, there is no precedent for the boomer generation. We’ve simply never had a demographic this big with this much wealth live this long before.

Just look at this chart from The Wall Street Journal that shows the number of people aged 65 or older (with projections out into the future):

But things don’t line up very neatly with my boomers-are-all-rich take when you breakdown the median net worth numbers by age group:

The averages are fairly low because the wealth is not evenly distributed.

Much of that boomer wealth sits at the top of the wealth pyramid

The top 1% holds nearly one-third of the wealth in this country while the top 10% controls two-thirds of the wealth. The bottom 90% has around one-third of the wealth in the United States.

So the concentration of homes on a beautiful island in Florida is not a story about generational wealth discrepancies. It’s a story about the concentration of wealth in this country.

Sure many boomers are rich but most of that money is controlled by a small percentage of that demographic.

Unfortunately, I think the concentration of wealth is a feature not a bug in the system in which we operate.

I wish I had a better conclusion than that but I don’t really have a good answer here.

Further Reading:
How the Housing Market Has Changed America

1The homeownership rate for millennials is more in the 40-50% range.

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

The Compound Media, Inc., an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here:

Please see disclosures here.