THE NEXT-GEN’S INCREASING PURCHASING POWER
In a survey of brokers from The Agency, 62% said younger buyers are their fastest growing demographic. It’s a trend that’s likely to continue, as members of Gen X, Millennials and Gen Z inherit the wealth of Baby Boomers and the Silent Generation.
For those under 25, the rate of homeownership has held steady at almost 24% from the second quarter of 2024 to the second quarter of this year, according to Realtor.com data provided to The Agency.
An estimated $84 trillion of U.S. wealth will change hands by 2045, with the majority going to Gen X and Millennial heirs, according to Cerulli Associates, a Boston-based research and consulting firm in the financial services industry. Cerulli projects that of the $84.4 trillion that will be transferred within the next 20 years, $72.6 trillion in assets will be transferred to heirs and $11.9 trillion donated to charities. More than $53 trillion will be transferred from households in the Baby Boomer generation (63%). Silent Generation households stand to transfer $15.8 trillion, the firm says.
Baby Boomers, America’s wealthiest generation, amassed their fortunes during a post- World War II economic boom that featured rising financial markets and falling tax rates.
And this shift is not happening only in the U.S. According to a UBS Survey from earlier this year, the percentage of super wealthy families globally that have a will or estate plan in place increased to 53% from 47%, as the transfer of wealth to heirs picks up steam.
In fact, while Baby Boomers still control most of the global wealth, the transfer to younger generations is well underway around the globe, according to this year’s Knight Frank Wealth Report. Interestingly, in the first-ever Next Generation Survey, Knight Frank found that high-end real estate topped the luxury asset list for this younger cohort, beating out cars, jets, and yachts.
