Your Home Will Be Worth $1 Million By 2050. Now What?

The National Association of REALTORS® projects the U.S. median home price could reach $1 million by 2050 [c5, c6]. While this sounds like a windfall for current homeowners, it’s a critical warning for those planning retirement and intergenerational wealth transfer. For many, their home equity is their primary retirement asset, far exceeding traditional savings

"Research from the National Association of REALTORS® shows homeowners in their 60s have typically owned their home for more than two decades, which translates to about $200,000—or more—in accumulated housing wealth from price appreciation alone. That is five times more than the median retirement savings."

. This projection means adult children may face unprecedented housing costs, potentially making it impossible to afford a home near their aging parents. Furthermore, if housing values stagnate or decline, as some indicators suggest a current imbalance between sellers and buyers might hint at

There are now a half million more house sellers than buyers. That's the worst since the 2008 housing crisis. The average American has two-thirds of their retirement in their home. If housing breaks, they break.

— Peter St Onge, Ph.D. link

, a significant portion of retirement wealth could evaporate, leaving many in a precarious position. This isn't just about future appreciation; it's about the stability of current retirement plans and the ability to pass on wealth.

For many Americans approaching or in retirement, their home isn't just a place to live; it's their primary investment. Research indicates homeowners in their 60s often have decades of homeownership, accumulating substantial equity – sometimes exceeding $200,000 from price appreciation alone

"Research from the National Association of REALTORS® shows homeowners in their 60s have typically owned their home for more than two decades, which translates to about $200,000—or more—in accumulated housing wealth from price appreciation alone. That is five times more than the median retirement savings."

. This figure dwarfs typical retirement savings, turning the family home into the de facto retirement fund. This reliance is particularly acute given that the average American has two-thirds of their retirement savings in their home

There are now a half million more house sellers than buyers. That's the worst since the 2008 housing crisis. The average American has two-thirds of their retirement in their home. If housing breaks, they break.

— Peter St Onge, Ph.D. link

. The projected $1 million median home price by 2050 [c5, c6] sounds like good news, but it amplifies the risk associated with this concentrated asset class. A downturn in the housing market could decimate retirement plans, a scenario that has echoes of the 2008 crisis where a housing collapse had severe consequences

There are now a half million more house sellers than buyers. That's the worst since the 2008 housing crisis. The average American has two-thirds of their retirement in their home. If housing breaks, they break.

— Peter St Onge, Ph.D. link

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The looming $1 million median home price isn't just a number; it's a barrier. For the adult children of today's homeowners, this projection suggests a future where homeownership is increasingly out of reach, especially in desirable areas. This directly impacts intergenerational wealth transfer, a key force reshaping retirement landscapes

"The coming intergenerational transfer of wealth is identified as one of the five forces reshaping the retirement landscape in another report, State Street's “The Shifting Global Landscape for Retirement.”"

. If parents can't downsize or tap into their equity easily due to market conditions or the desire to stay put, their ability to assist children financially diminishes. Conversely, if they must sell into a high-priced market to fund retirement, they might struggle to find affordable housing themselves. As one observer noted, older sellers often have family involved, suggesting a sensitivity to familial financial dynamics

92 year old seller - still very sharp First thing I did is ask if she had family close and make sure they were in the meeting I could have swiped a lot of equity, but then I would have to look in the mirror and sleep at night What I have noticed about older sellers they have…

— Shawn Gorham link

. The challenge is ensuring that equity built over decades can actually be passed on or utilized effectively, rather than becoming a locked-in, unspendable asset.

While the $1 million price target by 2050 is a long-term projection, current market dynamics offer clues about future stability. A significant imbalance of half a million more home sellers than buyers has been noted, the worst seen since the 2008 crisis

There are now a half million more house sellers than buyers. That's the worst since the 2008 housing crisis. The average American has two-thirds of their retirement in their home. If housing breaks, they break.

— Peter St Onge, Ph.D. link

. This suggests potential downward pressure or stagnation in certain markets. Furthermore, homeowners increasingly plan to stay put, with a substantial majority intending to remain in their current homes for the foreseeable future

State of home service spending (HVAC) 72% of homeowners plan to stay in their current homes for the foreseeable future When people buy a home, 20% - 25% of the time they replace the HVAC system But there’s a double hit to replacement demand Existing homeowners sitting on… https://t.co/novAXfbd3N

— Will Schryver link

. This can constrain new inventory and keep prices elevated in desirable areas, but it also means many existing homeowners are delaying major renovations or system replacements, potentially impacting future resale value or immediate cash flow needs. For older homeowners, the decision to sell or stay is complex, often involving significant equity tied up in properties that may not be generating cash flow, particularly if purchased during boom times

Just spoke to a married couple in their 70’s in my market. They have: - $500,000: Personal home equity - $450,000: Rental property equity in 5 rentals they bought during the COVID boom (no cash flow) - $300,000: 401k’s / IRAs - $30,000: Cash On paper they’re millionaires, but:…

— Jon Brooks link

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