There is much talk about a K-shaped economy and a K-shaped housing market where there's a solid high end market compared with a struggling lower end of the market. The reality is more of a Generational real estate market: yes, the volume of wealth amongst older buyers is where the vast majority of buying power lies in all things, including houses. The average homebuyer age is 40 years old but the median is 62! Baby boomers are around 42% of all home buyers right now. About 18%-19% of the U.S. population is 65 and older. 50 years ago, that number was roughly 10%. This means the share of older Americans has nearly doubled over the past half-century and the US population is 60% larger too, which impacts the volume numbers. 67 million people vs 21 million!

The reality is, the older you are, the longer your investments and savings compound, thereby amassing wealth. $100,000 invested at 8% over 5 years grows roughly 47%, while over 20 years it grows 466%! Many young people decry the concentration of wealth amongst older generations without acknowledging the decades it has taken to get there. A group that is working longer, saving longer, investing longer and living longer. Much longer. The good news? This wealth is already trickling down to aid younger buyers with down payments for homes and other purchases. Many younger buyers are aided by parents and grandparents when buying a home. The money being spent by older generations helps fuel the jobs of younger generations. Older generation spending also generates significant taxes, in addition to fueling consumer spending, which accounts for roughly 70% of US GDP.

The argument amongst some that older, wealthier people should hand over more of their income and wealth to governments for redistribution to pay for younger generations' needs is fraught with complications. The most efficient way to pass on this wealth is inter-generationally, not via taxation which usually consumes a large percentage of the usable capital. $1 collected by the federal government, results in approximately 60%-66% directly distributed to individual consumers and beneficiaries via social safety net programs and entitlements. Many older generations argue that their wealth was never handed to them via family or government, so why should young generations expect this now? Inflation and elevated inflation have been the enemy of all, except those with hard assets, mostly older generations.

So while the K-shaped real estate market is real, it's the Generational market that is defining most of the activity.