‘Silver Tsunami’ of Aging Boomers With $17 Trillion in Home Equity Will Trigger Wave of Wealth for Their Kids

Children of baby boomers are set to be on the receiving end of one of the largest generational wealth transfers in history as their parents prepare to bequeath them a staggering home equity fortune.

As the youngest boomers turn 60 this year, a generational shift some have dubbed the “silver tsunami,” it has been revealed that a significant majority of them are planning to pass their real estate wealth down to their children.

Three out of four boomer homeowners are currently looking to bequeath the proceeds from the sale of their homes, or the homes themselves, to their kids, says a new survey by Freddie Mac.

The anticipated transfer of wealth is expected to be vast and will likely reshape the finances of younger generations.

As of mid-2024, boomers hold around $17 trillion in home equity, which is about half of the nation’s total homeowners’ equity. That trove is mostly a result of the skyrocketing value of real estate over the past decade.

Baby boomers, now in their 60s and 70s, are also approaching retirement age and are optimistic about their finances, even after the Great Recession and the COVID-19 pandemic.

For many, that positive outlook carries over to their retirement plans, as well: 68% of the boomer homeowners who were surveyed expressed confidence in having a comfortable retirement, regardless of race. This is down from 2016 (76%) and 2021 (81%).

Downsizing is also a growing trend. Two-thirds of those who plan to move say they will likely downsize to smaller, more manageable homes that cost less to operate.

Nearly 75% of boomers surveyed said they planned to leave their home or its proceeds to their children. The massive wealth transfer will benefit the younger generations who inherit it.

Women are more likely than men to consider living with their children as they grow older. About 40% of women surveyed said they would be open to the idea, compared with 25% of men. Some who don’t want to live with their children did say they would consider living closer to them or on their properties, potentially in an accessory dwelling unit.

While many boomers are not counting on their home equity to fund their retirement, they see it as a cushion. Only 9% of boomers surveyed said they planned to tap their home equity or use a reverse mortgage. Most will pull from savings, pensions, and Social Security.

The coming wealth transfer will see a massive shift for millennials, who will inherit properties that have increased greatly in value. And since the housing market, with its high mortgage rates and home prices, has been an unfriendly place for buyers lately, having real estate inheritance waiting is an ace up the sleeve.

Freddie Mac says it has introduced a variety of resources, like specialized mortgages that will allow homeowners to renovate their properties or create ADUs, which can generate cash flow while helping boomers remain in their homes longer.

This silver tsunami could lead to a transfer of wealth that will lead to long-term financial stability for generations to come.