For a long time, owning a house has been viewed as a reliable way to build wealth, and recent studies highlight the advantageous position Baby Boomers have enjoyed in the housing market.

A report published on Thursday by Freddie Mac, a mortgage guarantor, underscores the financial strength of the post-war generation. As of 2024, the Baby Boomer cohort, which includes individuals born between 1946 and 1964, numbers about 65 million. This group represents 20% of the U.S. population and owns 36% of all homeowner households.

As Boomers age and eventually pass away, experts anticipate what Freddie analysts describe as a “Silver Tsunami” that will result in a transfer of wealth, termed a “Wave of Wealth,” benefiting their descendants and heirs.

Notable insights from the report include:

Boomers possess 50% of the nation’s home equity, valued at an impressive $17.3 trillion, based on Federal Reserve statistics. A survey conducted by Freddie Mac revealed that 75% of participants plan to leave their homes or the money from selling their homes to their children or family. Only 9% aim to use this home equity for their retirement.

Homeowners generally feel more optimistic about having a comfortable retirement compared to renters. Approximately 70% of homeowners reported feeling confident about achieving a “financially comfortable” retirement, in contrast to just 42% of renters. Research from the Aspen Institute earlier this year highlighted that renters have a median net worth of only $10,400, whereas homeowners boast about $400,000.

Furthermore, a significant majority of those surveyed attribute their wealth accumulation to having a fixed-rate mortgage. Although half of the respondents own their homes free and clear, among those who still have mortgages, over half (53%) benefit from an interest rate below 4%.

“This reflects the advantages of a 30-year fixed-rate mortgage,” explained Sonu Mittal, head of the Single-Family Acquisitions department at Freddie Mac, in a conversation with YSL News. “Baby Boomers have enjoyed the security and tranquility of consistent payments.”

However, some studies suggest that Boomers might be in a more favorable situation than the new generation of homeowners. Although fixed-rate mortgages provide stable principal and interest payments, the rising costs of property taxes and insurance are increasingly consuming a larger portion of monthly housing expenses.

Innovations within the industry, including certain mortgage products developed by Freddie Mac, aim to assist Boomers and their heirs as they navigate aging challenges.

For instance, their CHOICERenovation and CHOICEReno eXPress mortgages can provide valuable support for older homeowners wanting to make modifications to their current residences or even add an accessory dwelling unit, also referred to as a “granny flat” or “in-law unit.”