• In 2022, baby boomers owned twice as many large homes as millennials with kids, Redfin reported. 

• Boomers have little financial incentive to downsize as millennials struggle to buy.

• Land-use, tax, and other policies need to change, and many more homes need to be built, experts say.

Baby boomers whose kids don't live with them anymore are clinging to their large homes, making things worse for millennial families looking to settle down, a new Redfin analysis found.

In 2022, empty-nest boomers owned 28% of homes in the US with three or more bedrooms — double the 14% that millennials with kids owned, Redfin's analysis of Census Bureau data found. There's no city in the country where millennial families owned a larger share of big homes than boomers did.

It's just more evidence of the massive advantage boomers have over millennials in the housing market, as prices have soared, mortgage rates remain high, and a shortage of homes persists.

Many boomers bought their large homes decades ago, when they were much more affordable, even trading up for bigger houses later, Jenny Schuetz, a housing-policy expert at the Brookings Institution, said.

More than half of boomer homeowners didn't have a mortgage in 2022, and among this group, median monthly housing costs were just $612, Redfin found. That's much lower than the country's median monthly mortgage payment of $2,199 — giving empty-nesters plenty of reason to stay put. Boomer homeowners with mortgages have locked in much lower rates than they could get now.

"They have no financial incentive to move," Schuetz said. "They're consuming a lot more house than they really need, but it doesn't cost them very much."

Millennials with kids, meanwhile, are being locked out of the homes they want or need. Some are forced to move out of cities and into much-farther-flung suburbs than they'd ideally live in. Others simply can't afford to buy and are increasingly burdened by rent.

Most states also have a property-tax system that incentivizes homeowners to hang on to their property for as long as possible. Many have fixed property taxes that don't increase as the value of the home rises.

"Baby boomers are a very large demographic, and they vote more than millennials do," Daryl Fairweather, Redfin's chief economist, said. "That political landscape has allowed for there to be a lot of laws passed that benefit baby boomers who own homes. So things like property taxes carve-outs or exemptions for seniors — those are voted for by seniors who benefit from those laws."

On top of the affordability crisis, decades of restrictive zoning laws and other regulations have made it illegal in many places to build condos, apartments, townhomes, and other smaller homes boomers could downsize to. And the new apartments that are being built largely cater to younger households, Schuetz said. So many older homeowners, particularly those who have lower incomes, don't have many options.

A misallocation of housing

Not all boomers living in large homes are the same. More-affluent older homeowners, Schuetz said, can afford to downsize but have no financial incentive to, while lower-income homeowners often can't find affordable options in their communities.

"Most of the smaller units are new construction, and they're more expensive," Schuetz said. "So those are the ones that, from a policy perspective, I worry about more because they would like to move, and it could be better for them, but it's going to be just difficult to do that."

When aging empty nesters stay in large homes, it isn't just a misallocation of the housing supply but also often a challenge for them. As people age, they need homes that are more accessible and easier to maintain. Large homes often have multiple floors, yards, and other features that make them trickier to navigate for older people.

"There are baby boomers I've met who have two-story homes that they never go to the second story of because they can't go up the stairs anymore," Fairweather said.

Neighborhoods that tend to have large homes are often not walkable or accessible by public transit, so older folks can suffer from social isolation as they drive less, Schuetz said.

This problem is quite new. Even just 10 years ago, young families were as likely as empty nesters to own large, multibedroom homes, Redfin found. But it's been a long time coming. Decades of exclusionary housing policies and demographic shifts have created a crisis that researchers have been warning about for years.

Schuetz said there's not a dearth of large homes in the US. Instead, there's a mismatch between large homes and occupants who don't need them. But many more family-size apartments and other homes will need to be built to make up for the lack of large homes on the market.

It won't be easy to dig the housing market out of this hole. Fairweather said it would take eliminating zoning laws that require all homes to be single family, reformed property-tax laws, and subsidies to help get older folks into denser communities. Schuetz agreed that either increased property taxes or some sort of wealth tax could encourage wealthier boomers to downsize. But many of these policies are political third rails.

For now, millennial parents will have to settle for smaller, more-expensive homes.

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