Realtor.com; Getty Images
Baby boomers hold a major advantage in the housing market, even as younger generations struggle to get their foot in the door.
Right now, adults aged 60 to 78 own around 38% of the real estate in the U.S., yet they make up just a quarter of the population. About half of all boomers own their homes outright and enjoy unprecedented home equity.
In the second quarter of 2024, homeowner equity reached 72.7% of total real estate value, the highest since 1958.
Baby boomers might be eyeing that nest egg and wondering: Is now the time to sell?
For many boomers, cashing out while it’s still a seller’s market holds undeniable appeal. Downsizing to a smaller property or relocating to a more affordable area could free up significant cash, fueling retirement plans or long-planned adventures.
But before putting up that “For Sale” sign, it’s essential to weigh the trade-offs—especially if you’re planning to buy again in a high-priced market or face ballooning rental costs.
How boomers built their real estate portfolio
Many boomers bought their homes when “interest rates were higher, but the houses were still affordable,” Newton, MA, developer Cindy Stumpo says. “So you’re paying a higher interest rate for sure, but you were also paying less money for the house.”
Although mortgage rates in the 1980s soared as high as 13.74%, the much lower cost of homes meant boomers could build significant equity over time. For example, the average price of a home then was $73,400. When adjusted for inflation, that’s around $298,000.
Compare that with today’s national median home price of $424,950, and it’s clear why boomers believe they got the better end of the deal.
“Most boomers are likely not still in their first home, but if they were, the typical home is worth roughly five times what it was when they purchased,” says Realtor.com® senior economic research analyst Hannah Jones.
To sell or not to sell
According to a 2024 survey by Clever Real Estate, more than half of boomers (54%) say they have no plans to sell their homes, which has created a housing shortage and put a strain on the housing market for other generations.
With interest rates hovering below 7%, many boomers have little incentive to enter the market. Along with rising home costs, they’ve also gotten smaller. The price per square foot for a home in 1980 was $41. Today, it’s $226.
“It used to be, you sold your house and downsized, but you didn’t spend the same amount of money on the smaller property,” Stumpo says. “Everybody is sitting on these houses today worth a million dollars or more. There’s a lot of profit in the house. They’d love to sell it, but where are they going?”
How to decide to sell—or not
Forty years ago, the life expectancy was 73. Today, it’s 77. People are living longer, and their senior years are stretching out before them. Some might need a large infusion of cash to fund their living expenses beyond housing.
“Downsizing often becomes an appealing option when the burdens of maintaining a larger home outweigh the benefits of staying put,” says Angelica Ferguson VonDrak, an associate real estate broker with Sotheby’s International Realty in Rhinebeck, NY. “If your house has become more about unused rooms and escalating upkeep rather than comfort and joy, it might be time to explore something smaller.”
Boomers should consider how their home aligns with their financial and lifestyle goals when deciding to sell or stay.
Downsizing could free up resources and time to focus on what matters most in this stage of life. Look closely at your current expenses, and consider if the proceeds from a home sale could fund retirement or other major plans.
“Most boomer homeowners who purchased their home pre-pandemic, at any point, stand to make a significant profit in selling their home, which could be leveraged into another home purchase,” says Jones. “Some boomer sellers may be able to fully cover the cost of a new home by selling their current one if they are looking to downsize or to move to a lower-cost area.”
However, if staying put is more appealing, homeowners can leverage their home equity by taking out a home equity loan or line of credit.
Despite the rise in the cost per square foot, a smaller home or a location with a lower cost of living could help boomers better manage their budgets or simplify daily life. On the other hand, staying put offers a sense of stability for some.
By assessing priorities and crunching numbers, you can decide whether cashing out or staying put is the right move.
The safety issue
Safety is a major concern for older homeowners when it comes to whether to move or not.
“I run into boomers downsizing constantly in South Florida,” says Jeff Lichtenstein of Echo Fine Properties in Wellington, FL. “Most find it preferable to make a move when they see the signs of slipping and need to be closer to family and in a safer environment.”
However, moving isn’t always the only option.
“There was a time when boomers said, ‘OK, you know, we don’t want to do snowplowing anymore,” says VonDrak. “We don’t want to keep up the landscaping anymore. We don’t want to keep up the houses anymore.”
But now, instead of moving, many homeowners are adding age-friendly modifications—such as installing grab bars or ramps—and families are hiring help so their parents can stay in their homes longer.
Rent instead of sell
Boomers unsure whether they want to move can also try out short-term rentals.
“You can rent part time to explore downsizing while keeping your current home as a safety net,” suggests Andrew Latham, a certified financial planner and content director at Supermoney.com. “Think of it as a trial run. Test out a region where the cost of living is lower or spend a few months in that sunny beach town you’ve always dreamt about.”
While doing that, boomers can rent out all or part of their property and add some extra cash to their savings.
“This hybrid approach lets you dip your toes into new possibilities without cutting ties, giving you the flexibility to experiment and the security to keep your financial options open,” adds Latham.
Whether you choose to stay or move, it’s a deeply personal decision.
“Ultimately, the decision to sell or stay should reflect the life you envision now,” says VonDrak.