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By Giulia Carbonaro
Senior Reporter
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The long-awaited “silver tsunami” is starting to touch the shores of the U.S. housing market, with a new report showing that first-time homebuyers are increasingly relying on their inheritance to buy a home.
Stubbornly high borrowing costs and still rising home prices have created a situation where those who do succeed in achieving the American dream of homeownership are older and increasingly helped by inherited wealth.
Experts have long predicted that millions of aging Baby Boomers will eventually be responsible for the biggest transfer of wealth in history, with Cerulli Associates estimating that $85 trillion will be passed on to Gen Xers and millennials in the U.S. alone through 2048. Part of this massive transfer of wealth is expected to take the form of homes, as boomers, as the dominant force on the U.S. housing market, are estimated to hold about $20 trillion in real estate assets.
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What was predicted to be a sudden wave, however, is materializing as a slow trickle, partially because high borrowing costs are keeping many older Americans who own their home free and clear from downsizing and putting their properties on the market for younger families.
From Wave to Trickle, the Transformation Is Happening
Despite the state of “hibernation” of the market, there are signs that the “silver tsunami” has begun. The latest Profile of Home Buyers and Sellers report by the National Association of Realtors (NAR), released on Tuesday, found that inheritance is making all the difference, for many Americans, between being priced out of the market or being able to buy a home now.
“While the transfer of wealth is not yet a tsunami, a wealth transfer is happening, and it is transforming the buying market,” NAR researchers wrote in the report.
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This year, 10 percent of first-time buyers said they were funding their purchase through their inheritance. This marks the highest share on record and the fourth consecutive year of increases.
By comparison, 62 percent of first-time buyers cited using savings to make the purchase, while 30 percent used financial assets such as stocks, bonds, 401(k)s, IRAs or cryptocurrency, and 25 percent mentioned using a gift or loan from a relative or friend.
The inheritance effect is especially pronounced among first-time cash buyers: 28 percent used inheritance, versus 9 percent of first-time buyers who financed. Another 21 percent of first-time cash buyers used proceeds from the sale of a primary residence, which represents an inherited property as these respondents had never independently bought a home before.
But those using their inherited wealth to step onto the property ladder do not fit the traditional profile of the first-time homebuyer in America, who now has a median age of 40—in the 1980s, they were in their late 20s. All-cash, first-time buyers are older, for a median age of 54.
The result is that, in 2026, the first-time buyer is increasingly a middle-aged, financially stronger or family-assisted buyer rather than a young adult starting out. That fits the trend observed by NAR for the overall buyers in the U.S., who have a median age of 58 years, while the typical repeat buyer was 62.
Most Young People Cannot Afford to Buy A Home Right Now
The share of first-time buyers in the market remains near historic lows, at 22 percent, up 1 percentage point from last year. It is nearly half of what it was before the financial crisis of 2008, when the historical norm was 40 percent.
That is because affordability has eroded dramatically since then, especially after the start of the pandemic and the later rise in borrowing costs. Despite experts’ predictions last year that mortgage rates will decrease by the end of 2026, borrowing costs started climbing again after the start of the war in Iran. As of the week ending October 29, the 30-year fixed-rate mortgage was 7.24 percent, up from 6.17 percent a year earlier, according to Freddie Mac.
The high borrowing costs compounded with still rising home prices have naturally hindered access to a first home.
Among first-time buyers, many cited other obstacles as well: 28 percent said saving for the down payment was one of the most difficult steps in the process of buying a home. Within that group, 54 percent cited high rent as the reason saving for the down payment was difficult; 40 percent student loans; 36 percent credit-card debt; and 35 percent car loans.
This existing gap between first-time buyers kept to the sidelines of the market and those allowed to hop into it thanks to their inherited wealth is only likely to become larger with time, resulting in real financial differences in the future. NAR estimates that delaying homeownership by a decade can mean about $150,000 in lost equity gains.
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