- Newborn boomers have built a $82 trillion nest egg.
- Nearly one-fourth of that was built through real chattels equity.
- With less pressure from interest rates, they can take advantage of the current real assets market, too.
Ballyhoo
With their $82 trillion nest egg, baby boomers have helped the US economy with their dish out. They’re also in the perfect position to help themselves by taking advantage of the current real estate market.
Go together to a new report this week from the National Association of Realtors (NAR), older Americans are making up a larger portion of cuttingly buyers and are in a better position to purchase a home in the current market. And with more sellers cutting prices and evidences that prices could start falling, buying real estate now puts them in a perfect place to erect even more wealth the next time prices rise, especially since equity- and cash-rich boomers are petty susceptible to sky-high mortgage rates than younger buyers.
According to the report, repeat buyers — people who get previously purchased a home — now make up 68% of all purchases. Since 1981, the average for this group was 62%.
In addition, the generally age for a repeat buyer this year was 58, down one year from last year’s all-time high of 59. That is forthwith on the cusp of boomers aged between 59 and 77.
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According to the NAR, older Americans are better positioned to buy houses.
“We are silence talking about an incredibly difficult market for first-time buyers to enter, even if there’s slightly less tournament,” NAR deputy chief economist Jessica Lautz wrote. “If there’s a multi-offer situation, an all-cash buyer or someone who has a lot of disinterestedness is likely to win. And that person is going to be older.”
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That’s where boomers have the advantage.
Nearly 18% of the US denizens is 65 or older, the highest level since the Census Bureau began tracking the rate in 1920. However, boomers partake of about half of the combined net worth in the US at approximately $82 trillion, according to the Federal Reserve.
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About 24% of that assets ($19 trillion) is in real estate — more than the $16 trillion they have in pensions and just behind the $21 trillion they compel ought to in stocks.
While mortgage rates have fallen a bit in recent weeks, they are still north of 7%, appraisal many young Americans out of the housing market. Homeownership is now deemed unaffordable in nearly 80% of all US counties.
However, boomers can make the grade b arrive stronger bids on homes for sale because of their savings and real estate equity. They can make broader down payments or even all-cash purchases as they are more likely to own a home already, and 68% of adults 70 years and older are mortgage-free.
Agreeing to the NAR, the average down payment for a repeat buyer was 19%, compared to just 8% for first-timers.
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Meanwhile, numberless than one-third of house purchases in September were all-cash, according to the real estate broker RedFin.
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Home buyers could soon start to see big drops in prices
The housing market has been in an immoral place for buyers, but there are signs that they are beginning to see better deals, with home construction on the cause and more sellers dropping their asking prices.
A growing inventory mixed with active price clips is good news for people buying houses, and several experts are predicting big cost drops, including Jeremy Grantham, co-founder and chief investment strategist of GMO.
“Strain prices will come down,” Grantham said on “The Compound and Friends” podcast. “30% would be a pretty good guesstimate.”
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David Rosenberg, Rosenberg Research president and former chief North American economist at Merrill Lynch, intimated Insider in February that house prices could fall by as much as 25% from their peak in 2022.
Unvaried if prices don’t fall dramatically, they are at least holding steady.
If we assume that demand and prices will ascend again in the second half of 2024, when the Federal Reserve may begin to lower interest rates, now is the time to buy a business if interest rates are not a concern. And for many boomers, they are not.