Millennials vs. Baby Boomers: Millennials Now the Largest Segment of Housing Market

Marketing to Millennials: Advice for New Agents

Millennials vs. Baby Boomers:  Millennials Now the Largest Segment of Housing Market

Millennial home buyers have entered the housing market in a big way.

As of 2015, Millennials surpassed Baby Boomers as the largest generational group in America, and they now make up the largest group of home buyers.

As a new real estate agent, marketing to Millennials should be among your top priorities. You’ll want to begin building marketing campaigns that are specifically targeted toward this powerful group.

Start by gaining a better understanding of the demographic trends of potential buyers and sellers in your area—especially Millennials. Then learn how to connect and build relationships with these important real estate prospects.

Understanding Millennial home buyers

Sometimes labeled as “Generation Y,” Millennials are people born between the early 1980s and the early 2000s. They were projected to surpass 75.3 million people as a group in 2015, according to Pew Research Center.

With the core group of Millennials between 18 to 34 years old, they are now within age ranges where they are most ly to need a place to either lease or purchase.

Many of them (or at least those who can afford to do so) are beginning to buy their first homes and invest in real estate for the first time.

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When marketing to Millennials, consider these helpful statistics on Millennial home buyers and trends, as provided by Inman and the National Association of REALTORS® Home Buyer and Seller Generational Trends Report 2017:

  • 89% of Millennials would use a real estate agent. Yet, they may be harder to please compared to other generations.
  • 63% of Millennial home sellers would use their agent again, or refer the same agent to another. These are the lowest percentages of any generations surveyed.
  • 70% of Millennial home buyers would hire their agent again, or refer them to another.
  • 45% to 50% of Millennials originally found their real estate agent through a friend or family member.
  • Partly due to outstanding or delinquent student loan and credit card debt, the average Millennial credit score is 625 (per NerdWallet). As such, they are more ly to qualify under more flexible FHA-insured home mortgage loans.
  • Millennials are more into social media and texting than any generation ever. Yet, 75% of Millennials polled also to be contacted by telephone calls.
  • Millennials love the internet for communicating and finding real estate opportunities. Upwards of 94% of Millennials use online websites for home searches. 51% of Millennials later found the home they eventually purchased online first.
  • Millennials do love their high-tech gadgets but still rely on the wisdom of real estate agents, as noted by 87% of them eventually going to agents for assistance.
  • Millennials now make up 32% of all home buyers nationally, which is the largest proportion of any generation. The Gen X home buyers make up 27% of buyers. Younger Baby Boomers are reported at 16% of buyers, and older Baby Boomers account for 15% (31% combined).

Not included in the report is Generation Z, the newest generation to start hitting the housing market. Read more here.

How to connect with Millennial real estate prospects

Millennials love their technology. They grew up with high-tech gadgets, desktop computers, and smart devices. When marketing to Millennials, know that they are more ly to respond to online marketing and communication efforts as opposed to newspaper ads, flyers, and postcards.

Although you may have a physical office at your brokerage firm or at home, don’t forget to take advantage of an online virtual office, too.

This will allow you to interact with prospective Millennial home buyers online—whether through social media, email, Skype, text alerts, or other means.

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Some of the most effective options for targeting Millennial home buyers (and others) are shareable blog posts and short videos posted on and Vine.

Many agents today are writing their own blogs and posting videos from their smartphones onto social media sites that can be seen worldwide.

As more people “” their video tours of home listings or share them on , , LinkedIn, Pinterest, Google Plus, Tumblr, or Instagram, the potential growth rate of viewers is almost limitless.

Sales technique for marketing to Millennials

Tech-savvy Millennials also tend to have very short attention spans.

The famous AICDC (Attention, Interest, Conviction, Desire, and Close) sales technique—first developed by the Dale Carnegie Professional Sales Course several decades ago—still applies when marketing to Millennials.

Try using the following AICDC sales strategy on Millennial real estate prospects, keeping in mind that the very first step may be the most important.

  • Attention: First, you must grab or capture your prospect’s attention as quickly as possible.
  • Interest: Once you’ve sparked their attention, kindle their interest by asking them lots of probing questions to uncover their primary needs and interests before offering them solutions.
  • Conviction: Next, gain the customer’s conviction, or strong favorable opinions, by offering them evidence supporting beneficial claims, such as testimonials from past clients or exceptional housing price comps.
  • Desire: Then continue fueling the client’s “fire” (or desire) by showing them solid housing data numbers, inspiring videos, or beautiful open houses that support your claims.
  • Close: A high percentage of sales professionals are hesitant to ask for the close from the customer. But if you don’t ask, then the client can’t give you a very favorable “Yes” response after showing their significant interest, desire, and conviction in the product or service that you’re offering.

Marketing to Millennials may be challenging, but it’s worth the effort. To successfully grow your business as a new real estate agent, remember to focus at least some of your real estate marketing efforts toward this powerful target market.

Learn how and where to find Millennial real estate prospects online. Then make an effort to connect with them in meaningful ways.

Once you find the most qualified Millennial prospects, you can start building long-lasting relationships that will hopefully lead to lots of new referrals down the road.

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Baby boomers and the housing market on the cusp of COVID-19

Millennials vs. Baby Boomers:  Millennials Now the Largest Segment of Housing Market

Marijn Bolhuis, Judd N. L. Cramer 02 April 2020

The disproportionately large baby boomer cohort (born in the US from 1946 to 1964) has consistently been central to culture, politics, and the economy. The significance of their combined demand and purchasing power in terms of the housing market has been a frequent topic of conversation since at least the early 1990s. 

Assuming that it is first-time homebuyers that mainly drive the housing market, and most baby boomers had purchased their first homes by the late 1980s, Mankiw and Weil (1989) famously predicted that housing demand and prices would peak in the 1990s.

‘Generation X’ (the generation following the baby boomer cohort) was much smaller, to the extent that their first-home purchases in the 1990s would entail a relative decline in housing demand growth.

Mankiw and Weil’s (1989) predictions became somewhat infamous as the housing market boomed from the late 1990s until 2006.1

In a recent paper (Bolhuis and Cramer 2020), however, we revisit Mankiw and Weil’s hypothesis about the effects of ‘the baby boomer lifecycle’ on the US housing market. We suggest that Mankiw and Weil actually had the correct intuition but spoke too soon. Rather than their first-home purchases, it is the baby boomers’ retirements that may slow the housing market.

As baby boomers enter retirement, they are increasingly downsizing, a trend that affects different segments of the US housing market. We construct a novel dataset by combining neighbourhood-level housing market data with census information on demographics and housing structures.

Our empirical analysis reveals that, since the housing trough in 2012, larger homes (and those in neighbourhoods with relatively more baby boomers) underperform substantially in terms of price growth, home sales, and liquidity.

In the next two decades, as more and more baby boomers look to downsize, more than a quarter of the US homes occupied by their owner(s) will ly hit the market (Romem 2019).

If the trends we document continue, the underperformance of these homes on the housing market may put increased pressure on baby boomers’ savings, at the exact time that they move into retirement. 

Demographics and the lifecycle of housing demand

Housing demand tends to follow a predictable pattern over the lifecycle, as we summarise in Figure 1.

We use data from the 2017 American Community Survey to plot (for each age group) the share of recently purchased homes that have less than three or more than three bedrooms. Generally, home buyers start out in smaller homes.

During their child-rearing years, the demand for larger homes increases. Lifecycle demand peaks around age 40, when close to 50% of buyers move into homes with four or more bedrooms.

The mean value of recently purchased homes is $400,000, as shown on the righthand vertical axis in Figure 1. As buyers move closer to retirement, they tend to downsize, moving from the homes where they raised their families into considerably smaller homes, often with only one or two bedrooms. 

Figure 1 Lifecycle demand for different housing types

Notes: Data from the 2017 American Community Survey. Recent buyers are those that bought a home in last two years. Age refers to the age of the self-reported household head.

When applied to the baby boomer cohort, these lifecycle dynamics explain the relative increase in the demand for smaller homes in recent years. Between 2000 and 2020, the share of Americans over the age of 60 increased from 23% of the population in 2000, to 31% in 2020. This is expected to reach 34% in 2030.

Retiring baby boomers tend to ‘sell large’ and ‘buy small’, which means that their preferences increasingly overlap with those of the ‘millennial’ generation.

Currently the largest cohort in American society, millennials often seek out urban amenities and smaller living spaces (Couture and Handbury 2017), features for which they will increasingly have to compete with baby boomers on the housing market. 

We compute the resulting demand dynamics using a shift-share analysis, presented in Figure 2. Holding the buying shares of each age group constant, the relative demand for homes with more than four bedrooms fell by 7% between 2000 and 2020, while the reverse is true for smaller homes. 

Figure 2 Implied demand for different housing types

Notes: Population data from the NBER Census U.S. Intercensal County Population Data. Initial choice shares of housing types from the 2000 American Community Survey. Projections from CDC State Population Projections.

Older Americans’ homes lagging the market

Lifecycle-related changes in relative demand for different home types has already resulted in large adjustments in the US housing market, both within and across neighbourhoods.

We combine neighbourhood-level housing market data from Zillow with detailed census information on demographics and housing structures.

Figure 3 shows that since 2012 the price growth of houses with more than four bedrooms has lagged the price increases of one- and two-bedroom homes by about one percentage point per year (within the same zip code).2

Figure 3 Relative annual price growth of home types, within zip codes, 2012-19

Notes: Data from Zillow. Price index refers to the zip code-specific Zillow Home Price Index (HPI). We compute relative price growth by subtracting the HPI from the 2012-19 annual price growth of different home types in a neighbourhood. The figure plots the mean of this statistic across zip codes.

To measure local exposure to demographic change, we construct a demographic demand shock by using a neighbourhood’s composition of home types as shares, and county-level changes in the age composition as shifts. This allows us to construct within-county changes in demand for housing that are driven by the initial housing distribution in specific zip codes.

3 We find that the home prices in baby boomer-rich zip codes have declined substantially, relative to those in millennial-rich areas. This means that, within local labour markets, neighbourhoods that experienced a positive relative demand shock (more millennials) have experienced substantially faster home price growth over the latest cycle.

This is true both across the country and within counties, and these trends are driven by areas with lower housing supply elasticities.

4 For example, within Los Angeles County (the most populous county in the US), zip codes where 15% of the inhabitants are over the age of 60 have experienced about three percentage points higher annual home price growth than neighbourhoods where 30% of the population is older than 60 (Figure 4). 

Figure 4 Annual price growth of zip codes in Los Angeles County, 2012-19

Notes: Binned scatterplot of zip code-level 2012-19 annual price growth against its share of population that is over 60. Each bin represents about 5 zip codes. Home price data refer to Zillow’s Home Price Index (HPI). Population data from U.S. Census Data Tables, averaged over 2013-17 to preserve confidentiality.

We find that the homes of baby boomers have not only experienced slower price growth but have also become significantly harder to sell. Within the same county, a 1% lower demographic demand shock in a neighbourhood leads to an 11% relative decline in home sales.

Even though more and more houses in neighbourhoods with relatively greater numbers of older Americans are put up for sale, with the number of homes on the market increasing by eight percentage points more in these neighbourhoods, buyers are not following.

The expected time on the market, the percentage of homes sold with a cut, and the median price cut on sold homes all increase substantially in these neighbourhoods. 


Not only are large housing market corrections already underway, the combination of lifecycle effects and demographic developments means that these adjustments are ly to continue over the next decade. If the trends we document persist, they will have significant macroeconomic effects.

The asset position of the middle class tends to move closely with home prices (Kuhn et al. forthcoming), and older Americans are central to these trends. Currently, Americans over the age of 55 hold almost 60% of total housing wealth, with 60-75% of their assets held in real estate (Davis and Van Nieuwerburgh 2015).

Asset-wise, the middle class is almost completely dependent on housing, with retirement portfolios a distant second. Since many Americans in the middle class will retire within the next few years, they stand to exert demographic pressure on their neighbourhoods. This pressure might significantly affect the $16.

5 trillion in real estate wealth held in these households, precisely when they will need those assets most.

Covid-19 presents something of a wildcard in this context. The pandemic can reverse or accelerate these adjustments, and it is too early to tell what the wider effects of the virus may be. Confined to their urban apartments, millennials may come to prefer the distancing of the suburbs again, reversing current trends.

In the tragic case that the lives of older Americans are lost at higher rates than their younger compatriots, the trends we document might accelerate. As we begin to think through the economic fall the pandemic, the effects of demographic distribution on the US housing market will have to be taken into account.

Clearly, the stakes are high.


Autor, D H, D Dorn and G H Hanson (2013), “The China Syndrome: Local Labor Market Effects of Import Competition in the United States”, The American Economic Review 103(6): 2121-2168.

Bartik, T J (1991), Who benefits from state and local economic development policies? Kalamazoo, MI: W E Upjohn Institute for Employment Research.

Bolhuis, M A and J N L Cramer (2020), “The Millennial Boom, the Baby Bust, and the Housing Market”, arXiv preprint arXiv: 3102262. 

Couture, V and J Handbury (2017), “Urban revival in America, 2000 to 2010”, NBER Working Paper w24084.

Davis, M A, and S Van Nieuwerburgh (2015), “Housing, finance, and the macroeconomy”, Handbook of Regional and Urban Economics 5: 753-811.

Hamilton, B W (1991), “The baby boom, the baby bust, and the housing market. A second look”, Regional Science and Urban Economics 21(4): 547-552.

Kuhn, M, M Schularick and U I Steins (forthcoming), “Income and wealth inequality in America”, Journal of Political Economy, forthcoming.

Mankiw, N G and D N Weil (1989), “The baby boom, the baby bust, and the housing market”, Regional Science and Urban Economics 19(2): 235-258.

Mankiw, N G and D N Weil(1992), “The Baby Boom, the Baby Bust, and the Housing Market”, Regional Science and Urban Economics 21(4), 541-52.

Romem, I (2019), The Silver Tsunami: Which Areas will be Flooded with Homes once Boomers Start Leaving Them? Available at:

Saiz, A (2010), “The geographic determinants of housing supply”, The Quarterly Journal of Economics 125(3): 1253-1296.


1 See Mankiw & Weil (1989) for the original prediction that changing demographics would lead to a fall in housing prices in the 1990s. See Hamilton (1991) for a critical evaluation of their empirical methods.

In a later reply to their original paper, Mankiw & Weil (1992) concluded that demographics were still a central driving force behind the housing market, and that housing demand would remain depressed during the 1990s. In hindsight, the growth of home sales and prices did falter in 1989 and remained low during the early 1990s.

Growth picked up from 1996 onwards, continuously increasing into the 2006 housing bust that led to the Great Recession.

2 The U.S. is divided into almost 42 thousand zip codes, with about eight thousand citizens per zip code. Even metropolitan areas contain many zip codes. Los Angeles County, for example, is divided into 505 zip codes. 

3 This Bartik (1991) shift-share shock is analogous to a labour demand shift-share instrument (e.g. Autor et al. 2013) that uses within-region (e.g. local labour markets) industry composition as shares and regional (e.g. state) industry growth rates as shifts. 

4 We exploit variation across U.S. metropolitan areas in the housing supply elasticity (Saiz 2008).

Almost all predictive power of neighbourhoods' share of baby boomers is accounted for by the 50% of MSAs with the lowest supply elasticities.

These results support our conjecture that the stark differences in price growth across neighbourhoods and home types are driven by relative demand shocks to homes with fewer bedrooms.


Millennials vs. Baby Boomers:  Millennials Now the Largest Segment of Housing Market

If you’ve ever put a Baby Boomer and a Millennial in the same room, you know there are some different personality characteristics, priorities and attitudes associated with each generation.

These characteristics result in different goals, lifestyle choices and purchasing behaviors. Sure, not everyone identifies with every generational trait associated with their age group.

But knowing the general trends for each group can help you make smarter moves when marketing homes to each generation.


Baby Boomers have recently found themselves with empty nests as their kids move out and start lives of their own. They’re looking to downsize to more reasonably sized homes and neighborhoods as they finish paying off their mortgages. There seems to be two different behaviors among Baby Boomers.

Some are looking to move to communities tailored to their new lifestyle. They also want to live among a population that is in the same age group they fall in. Others are looking to move to more walkable neighborhoods with a generous amount of restaurants and shops to choose from.

They see their empty nests as an opportunity to start living life for themselves again. The desire to remain independent and to stay close to friends and family seem to be the most consistent trends among this generation. Baby Boomers do not want to move into assisted care facilities or leave their personal homes and neighborhoods.

Instead, they would prefer to have these care services available at home if they’re needed.

Gen X

Generation X was dealt a bad hand during the housing market crash in 2007. Many people in this group were just buying homes and investing in properties when the market started going downhill. Because of this, a large portion of Generation X has been renting in recent years rather than buying. The main reason for this? Cost.

A portion of Generation X lost their homes to foreclosure or missed out on the opportunity to buy due to the market being so unfavorable. Now that the housing market is looking up, Generation X has had a chance to recover and is looking to buy again.

Those who are starting to buy place priority in a location that is close to work and close to schools for their kids. Think of these kinds of locations as convenient suburbs where you’re not in the hustle and bustle of an urban location, but have similar access to entertainment, food and activities.

Having a prestigious and well rated school system nearby is another top priority for these buyers who have kids currently in the school system.


The Millennial generation highly values experiences and the freedom to live life when and how they want to. For this reason Millennials often cite location as one of the top influencing factors while on the house hunt.

They want to be where the action is, and have access to public transportation if they need it. The closer they are to restaurants, bars and venues, the better. Millennials take pride in their independence and their ability to function and entertain themselves.

For this reason, some of the top places listed for Millennials to live in are cities immersed in culture San Francisco, Denver and Seattle.

Generation Z

Generation Z is starting to become independent from their parents and are renting their first apartments. It’s important to consider this group as the future of the real estate industry.

Many of these individuals grew up seeing the financial hardships Millennials faced when it came to student loan debt and finding jobs after college. Because of this, many of them are frugal and already starting to save money for their future.

This mentality has drawn them to desire more reasonably sized homes and neighborhoods that won’t break the bank in the future. In addition to their desire to find smaller homes, many members of Generation Z actually see themselves living in the suburbs.

This is a stark difference from the preferences of their predecessors in the Millennial generation. Generation Z wants to stay close to home, but ly not in the same neighborhood or town that they grew up in.

Your clients will ly disclose their neighborhood needs and wants to you as you walk them through the home buying process. That said, having a possible starting point their generational trends could prove to be helpful while preparing. Just remember to listen to your client and you'll have them in the house of their dreams in no time.


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