This is a chart by economist Gray Kimbrough from 2019. I recently saw it resurface and so I thought I would reshare it here on the blog.

The y-axis is the percentage of US household wealth (by demographic cohort). And the x-axis is median cohort age. So one way to look at this chart is as follows.

When the median age of a Baby Boomer was 35 (which happened in 1990), they owned about 21% of US household wealth.

When the median age of a Gen Xer was 35 (which happened in 2008), they owned about 9% of US household wealth.

Millennials haven't yet hit a median age of 35, but in 2019 they owned about 3.2% of US household wealth.

Of course, one thing to keep in mind is that these demographic cohorts are not the same size. In 1990, Boomers represented 31% of the US population. And in 2008, Gen Xers were only 22% of the population.

But even if you normalize, there are some intergenerational wealth gaps here.

The Wall Street Journal estimates that, from now until about 2037, roughly 21 million homes in the United States will be vacated by seniors. To put this number into perspective, it's about 25% of the US for-sale housing stock and more than double the amount of new homes that were sold during the 1998 to 2008 housing boom. That number was about 10 million (see below).

This is part of the normal cycle of housing, but in this particular instance, there's concern that the new generation won't be there to backfill these homes, or least not in the same way. For one, there are more boomers than there are Gen Xers. So right away there's a potential gap. But on top of this, the next in line don't appear to necessarily have the same preferences in housing type and location.

As someone who would fall into the 65.9 million birth bucket highlighted in deep mustard (had I been born in the US), I can tell you that I am far less interested in many of the housing products (real estate speak) / typologies (architect speak) popularized by the generation ahead of me. Whether my opinion is representative is, of course, debatable.

Anecdotally, I can also say that I know many boomers who have started making real estate decisions based on the assumption that demand for certain types of housing will be tepid going forward. This is not to say that some of these communities won't be able to reposition themselves if it comes to that. But there is uncertainty.

Images: WSJ