This Surprising Age Demographic Now Makes Up the Largest Share of Home Buyers. Here's Why

When you imagine people on the hunt for a new home, who are you picturing? Young-ish couples, perhaps with a child in tow, or older folks who look like they might be on the cusp of retirement?

Chances are, you'd think of the former. But these days, older buyers are scooping up more homes than their younger counterparts. And there's a good reason for that.

Millennials are no longer the largest group of home buyers

For years, millennials held the distinction of making up the largest share of home buyers. But a recent report from the National Association of Realtors reveals that baby boomers now comprise 39% of home buyers, which is a larger percentage than any other generation. Millennials, who represented the largest share of home buyers from 2014 until they were recently surpassed by baby boomers, now make up just 28% of buyers.

Why are baby boomers buying so many homes?

So why have baby boomers managed to bump millennials out of the top spot when it comes to home-buying activity? It's simple. Boomers are likely to have been in their homes for a longer period of time. As such, they might have a lot more equity built up than their younger counterparts. And it's that very equity that might be giving them more flexibility to purchase a home in today's tough market.

These days, not only are home prices elevated, but mortgage rates are high compared to where they've sat for the past few years. But baby boomers with large levels of equity in their existing homes may not have to worry about signing a mortgage. Some of those boomer buyers might be in a position to sell their existing homes and walk away with enough money for a new home that they don't need to finance at all.

Plus, many baby boomers are close to retirement age, or have retired already. And housing needs can change once retirement rolls around.

Perhaps some baby boomers paid a premium to live in cities so they could be close to their offices while they were working. If they're now no longer working, they may not need that access -- so why not buy a new home that offers more space and a lower property tax bill?

All told, it's easy to see why baby boomers now make up the largest share of home buyers. This doesn't mean that millennials aren't seeking to buy homes, or that they shouldn't buy. But boomers have a very clear advantage, whereas millennials who have never owned a home before might really struggle to break into today's market.

Of course, once housing inventory opens up, it could allow for home prices to come down. And as that happens, millennials might manage to overtake boomers as the generation that's buying the most homes. But until some financial relief comes down the pike for home buyers, millennials might have to sit on the sidelines and stay out of the real estate market while baby boomers continue to jump right in.