Trillions in Home Equity Set to Transfer from Baby Boomers to Next Generation
A significant generational wealth transfer is on the horizon, with trillions of dollars in home equity set to pass from Baby Boomers to their heirs, according to a recent Freddie Mac report.
The government-backed mortgage giant estimates that $17 trillion in home equity held by those born before 1964 will soon be inherited by their children and family members.
Data from the Federal Reserve reveals that Boomers currently hold half of all U.S. home equity, amounting to $17.3 trillion as of mid-2024. The report highlights that about 75% of Boomers plan to leave their homes or the proceeds from their sale to their families, signaling a massive intergenerational wealth shift.
Freddie Mac also notes the role of fixed-rate mortgages in enabling Boomers to build substantial wealth over time. An overwhelming 83% of homeowners surveyed agreed that such mortgages have been key to their financial stability, while only 9% of Boomers intend to use their home equity for retirement expenses. Notably, half of Boomer homeowners have fully paid off their homes, and many of those with mortgages enjoy historically low interest rates below 4%.
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The housing market landscape has evolved dramatically over the past 50 years, with the home price-to-income ratio more than doubling from 3.65 in 1974 to 7.25 at the close of 2024. This figure surpasses the peaks of the 2006 housing bubble, reflecting the long-term rise in property values.
Sonu Mittal, Freddie Mac’s senior vice president for single-family acquisitions, emphasized the importance of maintaining a robust housing finance system, stating, “The Baby Boomer generation has greatly benefited from our nation’s unique housing policies. Ensuring this system endures will be critical for future generations.”
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
