Millennials are blaming boomers for the starter home shortage, survey finds

• Some millennials blame boomers for the starter home shortage, a new study found.
• Boomers looking to downsize want those starter homes, and they're winning most bidding wars.

The latest in generational warfare: Some millennials are pointing the finger of blame at boomers for the housing shortage.

So finds a recent study by asset manager and insurer Legal & General, which polled 875 non-homeowning millennials. While this is a small sample size, the report revealed a notable trend in respondents blaming older generations for their housing difficulties.

As one respondent wrote, "Boomers need to stop buying starter homes as their retirement homes. It's driving the cost up to where first-time homebuyers can't afford it."

Another felt similarly: "It's hard to afford the homes in budget because boomers are also buying them."

Nearly half (48%) of millennials who don't own a home are saving for a down payment, the survey found. But 55% of them can't afford to buy yet in today's heated housing market, where record prices have reached a record median high of $386,888, being boxed out of first-time homeownership explains a lot about their resentment.

"Homeownership is increasingly concentrated in the hands of older generations, which have hoarded wealth and restricted my generation's access to similar economic opportunities," wrote a respondent.

Some respondents even feel boomers are contributing to their overall economic plight, marked by two recessions before the age of 40 and soaring living costs. They said boomers' abuse of the American Dream made millennials' pursuit of the same ideal more difficult, and that boomers got rid of many programs that would have been helpful for millennials to achieve it.

Even boomers themselves agree. Billionaire Howard Marks, investor and cofounder of Oaktree Capital management, recently took a shot at his generation for leaving younger generations with excessive debt. And demographer Neil Howe, who coined the term "millennial," previously told Insider boomers refused to pay for institutional upkeep, which has contributed to the affordability crisis millennials are dealing with.

It's not all boomers' fault

Now, there's some truth to this blame and some major caveats.

As the Legal & General study points out, boomers looking to downsize are shopping for starter homes that fall within millennials' budgets. A Zillow report from October found that so many boomers are active in the housing market that it's become more difficult for millennials to buy a home.

As longtime homeowners with equity gains to put in an all-cash offer, boomers are more likely to emerge victorious in bidding wars over millennials, who struggled to save for down payments even before the pandemic.

Americans 60 years old and older have been more active in the housing market in the past decade than people in the same age group 10 years earlier. The share of homebuyers in this cohort grew by 47% from 2009 to 2019. Meanwhile, the share of younger buyers ages 18 to 39 in the past decade has shrunk by 13% in the same time frame.

But it would be unfair to blame the housing crisis on hands of boomers when there are many factors at play. There have been 20 times fewer homes built in the past decade than in any decade as far back as the 1960s, Daryl Fairweather, chief economist at Redfin, told Insider back in April.

And the pandemic hasn't helped housing scarcity. Some owners haven't been listing their homes as a safety precaution, Gay Cororaton, the director of housing and commercial research for the National Association of Realtors (NAR), previously told Insider. Others are wary of putting them on the market for fear of being unable to find an affordable replacement to buy.

She added that there might have been more homes on the market absent a historic lumber shortage. Lumber factories shut down almost immediately in March 2020 because of safety restrictions. When the housing market opened up, Americans bought more new houses than the lumber industry could keep up with. As lumber prices skyrocketed, the cost was passed down to homebuyers.

And with millennials aging into their peak homebuying years, their demand is only exacerbating the shortage. Boomers may not be the sole cause of the housing crisis, but they too are intensifying a market that has never been so competitive thanks to many economic forces.