“OK, Boomer”… Think again. How do Millennials measure up to their Boomer parents when it comes to real estate and homeownership?
What does OK Boomer mean?
OK Boomer is a viral internet slang phrase used, often in a humorous or ironic manner, to call out or dismiss out-of-touch or close-minded opinions associated with the baby boomer generation and older people more generally.Nov 4, 2019 – ‘OK boomer’ is dividing generations. What does it mean? – NBCNews.com
I must admit this “OK Boomer” thing caught me by surprise. In our business, we work daily with baby boomer parents and grandparents who made sure their millennial children grew up in financially secure homes, attended college, and got help when they needed it. Many of these same boomers struggled on their own to work their way through school, at whatever jobs they could find, worked two jobs when their children were young, delayed taking vacations, and small luxuries until their children were grown.
When boomers were roughly the same age as millennials are now, they owned about 21% of America’s wealth, compared to millennials’ 3% share today, according to recent Fed data.
As a leading-edge baby boomer, I do not even recall knowing one could get a loan to attend college. The only assistance I heard about was the National Merit Scholarship; while I was Top 10 in my class, I was not that smart. College loans were hard to get even for younger boomers and applicants needed the income to support the loan. Only tuition, books and housing were covered and funds distributed directly to the school. With today’s Federally Guaranteed Student Loan program, excess funds may be returned to the student to use for living expenses, transportation, books and supplies. That’s where some millennials ended up with too much debt.
Millennials are renting longer and buying later — millennial homeownership was at a record low in 2017, Business Insider’s Akin Oyedele reported. It doesn’t help that those buying their first home will pay 39% more than their parents did nearly 40 years ago, according to Student Loan Hero.
However, take a look at interest rates! Over the past 48 years, interest rates on the 30-year fixed-rate mortgage have ranged from as high as 18.63% in 1981 to as low as 3.31% in 2012. Mortgage rates today remain at historic lows, with 30-year rates below 4%. This means today’s buyers can qualify for a lot more house.
The Tide is now turning
Now these same boomers have accumulated wealth and are getting ready to leave an inheritance to their millennial children. Many of these aging boomers are also helping with grandchildren, so their millennial children can pursue careers or advance their education. In fact, some of our clients end up selling their dream retirement home to return home to provide full-time care and help with living expenses.
Millennials were also expected to overtake boomers in population in 2019 as their numbers swell to 73 million and boomers decline to 72 million. Pew Research, March 1, 2018, http://pewrsr.ch/2FgVPwv
OK Millennials, it’s your turn.
P.S. Things you can say to your millennial children. Boomers fight back!