Wealthy millennials are driving the housing frenzy, but it's coming at the cost of their less wealthy peers

• Wealthy millennials have been driving much of the housing frenzy.
• Brokers told The Washington Post the biggest impact of millennial homebuyers is felt in the high-end market.

At the center of many a housing bidding war, there's likely a wealthy millennial.

Millennials aged into peak age for homeownership during the pandemic, with a record number of the generation hoping to buy homes in 2020. They comprised the largest share of homebuyers in that year, at 37%, per data from the National Association of Realtors (NAR). But brokers recently told Troy McMullen of The Washington Post that millennial impact is most felt at the higher-end of the market, sending housing prices soaring everywhere from tech hubs like Seattle to rising star cities like Nashville.

"We've never really seen this kind of impact from younger buyers before," Christie-Anne Weiss, senior vice president and associate broker at TTR Sotheby's International Real Estate in the DC metro area, told McMullen. Weiss said her team had 21 clients close contracts on homes that sold anywhere from $400,000 to $3 million last year.

She added: "The sheer number of clients in their 20s and 30s looking to buy homes is making this market much more competitive, especially at the middle and higher end."

It's a far cry from the 2010s state of millennial housing, in which the generation spent years piecing together enough savings for a down payment on a home as many struggled to recover from the fallout of the financial crisis and to pay off their student loans. Enough savings, historically low interest rates, and a new era of remote work finally made their homeowning dreams possible in the 2020s.

But the wealthy millennial homebuying spree is coming at the expense of their less wealthy peers, who are now being pushed out of the housing market. That's because the demand, along with a lumber shortage and an undersupply of homes since the Great Recession, catapulted the market into a historic housing crisis. Housing prices climbed to a record high of $388,633 in February.

As Redfin chief economist Daryl Fairweather told Insider last year, the typical millennial looking to buy a home for the first time is "already boxed out of the housing market."

Nearly a quarter of millennials said the pandemic decreased their chances of homeownership in Bank of America Research's 2021 millennial home improvement report. And more millennials plan to rent forever than they did before the pandemic.

The millennial homeownership divide mirrors how the pandemic widened economic inequalities among millennials, with the wealthier cohort able to build up their savings while others were financially devastated by unemployment losses.

Data signals that the housing market is slowly cooling off, which could help close the gap in millennial homeownership. But millennial housing demand has only just begun. Dana Peterson, chief economist at non-profit The Conference Board, previously told Insider this means higher prices may be the norm until supply starts to catch up with demand.

"The sheer size of the millennial population, and the fact that they are just entering peak years for starting families and earning money, means that demand for housing has room to run," she said.