CHM Blog

Baby Boomers Overtake Millennials as largest Generation of Home Buyers:

The share of baby boomers has surpassed millennials and now makes up the largest generation of home buyers, according to the latest study from the National Association of Realtors®.

The 2023 Home Buyers and Sellers Generational Trends report, which examines the similarities and differences of recent home buyers and sellers across generations, found that the combined share of younger boomer (58 to 67 years old) and older boomer buyers (68 to 76 years old) rose to 39% in 2022, up from 29% the year prior.

Younger millennials (24 to 32 years old) and older millennials (33 to 42 years old) have been the top group of buyers since 2014, but they saw their combined share fall from 43% in 2021 to 28% last year.

"Baby boomers have the upper hand in the homebuying market," said Dr. Jessica Lautz, NAR deputy chief economist and vice president of research. "The majority of them are repeat buyers who have housing equity to propel them into their dream home – be it a place to enjoy retirement or a home near friends and family. They are living healthier and longer and making housing trades later in life."

Twenty-six percent of all buyers were first-time buyers, the lowest since NAR began tracking the data and a decrease from 34% last year. Seventy percent of younger millennials and 46% of older millennials were first-time buyers. Behind these groups, only 21% of Generation X (43 to 57 years old) and 9% of younger boomers were first-time purchasers. Generation Z – ages 18 to 23 – now makes up 4% of home buyers, a slight increase from 2% in 2021. Nearly one in three Gen Z buyers – 30% – moved directly from a family member's home into homeownership. Finding a location convenient to friends and family was most important to this cohort of buyers.

How Rates Move:

Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market.  This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events.  When MBS pricing goes up, mortgage rates or pricing generally goes down.  When they fall, mortgage pricing goes up.  Tracking these securities real-time is critical.  For more information about the rate market, contact me directly.  I’m among few mortgage professionals who have access to live trading screens during market hours.

Rates Currently Trending: Neutral

Mortgage rates are edging higher today. The MBS market worsened by -14 bps last week. This was not enough to increase mortgage rates or fees. The market experienced high volatility last week.

This Week's Rate Forecast: Neutral

Three Things: These are the three areas that have the greatest ability to impact rates this week. 1) Inflation, 2) Central Banks and 3) Geopolitical

1) Inflation: The biggest economic release of the week is Tuesday's CPI data which is expected to show an additional MOM gain, the spread of that gain will have a big impact on rates. We will also get PPI on Wednesday which is expected to weaken. We will also see some inflationary data in Import/Export data and UofM Consumer Sentiment.

2) Central Banks: We will get a key interest rate decision out of the Bank of Canada which had "paused" at their prior meeting. The IMF is also a main focus as this week they have their annual meetings this week. Our own Federal Reserve will release the Minutes from their last FOMC meeting on Wednesday and we will hear from several Talking Fed.

3) Geopolitical: The bond market is very much focused on the heightened military stress with China/Taiwan as well as continued concern over Ukraine/Russia.

Treasury Sales: We have a very important 30 year Bond auction on Thursday.

04/11 3 year note

04/12 10 year note

04/13 30 year bond

This Week's Potential Volatility: High

This morning markets are under mild pressure. Volatility is low to start but will spike on the inflation reports later this week.

Bottom Line:

If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.

Richard Sardella has been actively managing and providing services in the mortgage industry for over 30 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

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