Walt Molony, spokesman for the National Association of Realtors, says that baby boomers are in a better position to buy a house today than they have been in years. These baby boomers could reinvigorate the real estate market for a couple of reasons. The Housing Affordability Index shows affordability at an all-time high for baby boomers, measuring how much house they can afford on their medium salary. Baby boomers with a strong financial management plan may find this economic downturn to be the perfect time to invest in real estate.
This demographic of homeowners has most likely lived in their current homes for several years and accrued a much larger amount of home equity that many first-time home buyers. Unfortunately, people from Generation X that entered the market when it was at an all time high do not have this luxury.
According to NAR, first-time homebuyers purchased only 35% of homes in the 2nd quarter of 2011 which is down from 46% last year. Repeat buyers, on the other hand, leaped up to 56% of the market share which is up from 40% this quarter last year. 65% of these repeat buyers are baby boomers and are 45 years old or older.
It will take some time for the market to turn around but the baby boomers may be positioned best to take advantage of it.