For centuries housing has been both shelter and a financial asset, which is an awkward combination. We do not ask the family refrigerator to appreciate at 5 percent a year, finance retirement, signal social status, and remain affordable to the next generation. Yet we routinely ask all four of a house. The result is a market in which the starter home, the “peak” home of the family and/or career years, and the retirement home are connected parts of a lifetime balance sheet – and increasingly, a source of intergenerational consternation.
The familiar story says earlier generations bought houses cheaply while today’s younger homebuyers squandered their down payments on avocado toast. The evidence is less tidy, and therefore more useful. In the first quarter of 1980, the median new home sold for $63,700; in the second quarter of 2026, it was $410,700 (1). Now, without context, those numbers could be misleading… but they are generally not. Adjusted for inflation, that same $63,700 house would sell for $280,000 today. But keep in mind that buyers in the early 1980s did not enjoy financial paradise: mortgage rates averaged roughly 16 percent in 1980 and 18 percent in 1981, and the 30-year rate briefly reached 18.63 percent (2). Today’s rate is far below that peak (6.67 percent in mid-August 2026), but today’s principal balance is vastly larger. An 18 percent rate is a beast, but a $410,000 price tag is another beast that might also demand a six-figure down payment.
That distinction matters. High interest rates can fall, allowing an owner to refinance; a high purchase price and the cash required at closing are harder to renegotiate. Earlier households also benefited, unevenly, from subsequent disinflation, refinancing opportunities, wage growth, and decades of appreciation. Current first-time buyers must clear the price barrier before any of those benefits begin. The median age of a first-time buyer reached 40 in 2025, up from about 30 in 2010, while first-time buyers fell to a record-low 21 percent of purchasers (3). The “starter” home is increasingly acquired at an age when prior generations were contemplating the “move-up” home.
If you are a younger Millennial or a member of Generation Z, you have a chance to begin planning well before browsing listings in your app – that’s the good news! A home purchase fund should be separated from emergency savings. Buyers should model the full monthly cost of ownership: principal, interest, taxes, insurance, association fees, maintenance, and commuting (to name a few), not merely the mortgage payment shown in an advertisement. Younger buyers should also test the budget against insurance increases, repairs, and a potential temporary reduction in income. Down-payment assistance, shared-equity programs, community land trusts, innovative types of homes, and small multifamily properties can widen the path, but each has rules and tradeoffs that deserve professional review. At the public level, legalizing smaller homes, accelerating permits, and preserving existing lower-cost stock would improve opportunity more durably than inventing new ways for buyers to bid the same scarce houses higher.
The peak home – typically purchased during higher-earning years to accommodate children, work, caregiving, or a preferred school district – creates a different affordability puzzle. Generation X (arguably the greatest generation in human history…) and older Millennials may have accumulated equity, particularly if they bought or refinanced when rates were low. Yet that advantage can become a gilded cage. A household with a 3 percent mortgage may resist moving even when its home no longer fits, because replacing the loan at current rates could raise the payment sharply. Freddie Mac’s research shows that mortgage-rate lock-in has become a significant constraint on mobility. Meanwhile, the cost of ownership does not stop at the mortgage: Harvard’s Joint Center for Housing Studies reports that home-insurance premiums rose 57 percent from 2019 through 2024, helping push the number of cost-burdened homeowners to 20.3 million in 2023 (4). Apparently the phrase “fixed-rate housing cost” forgot to invite taxes, insurance, and roofs to the meeting!
Planning for the peak-home years should begin with function rather than maximum purchasing power. A family that buys less house than a lender approves preserves room for education, elder care, retirement contributions, and the occasional vacation. For this home, buyers should compare renovating with moving, consider whether school or commuting premiums will still matter in ten years, and avoid treating expected appreciation as guaranteed income. A larger home may be entirely rational when it provides stability, accessibility, or space that will be used for many years. It becomes less rational when it is purchased primarily because adulthood seems to require a media room, a room that has the word “cave” in it, or a formal dining room used twice a year.
Retirement housing completes the house circle, particularly for affluent Baby Boomers and members of the Silent Generation whose long-owned “peak” home may now contain substantial equity. For this group, the question is often not whether retirement housing can be afforded in the ordinary sense, but how wealth should be converted into a combination of convenience, care, predictability, and legacy. A large mortgage-free house may look inexpensive on a spreadsheet while requiring landscaping, repairs, transportation, household management, and a growing patchwork of private care. The balance sheet may be healthy even when the living arrangement is becoming operationally absurd – an outcome familiar to anyone who has watched two people occupy seven rooms while conducting daily diplomacy with a staircase.
At the highest end of the continuing care retirement community market (CCRC for shorthand, or any number of other fancy marketing-driven names for such a community), the proposition resembles a hybrid of real estate, hospitality, health-care access, and longevity insurance. Residents may receive spacious apartments or villas, multiple dining venues, concierge services, extensive cultural and wellness programming, and priority access to assisted living, memory care, and skilled nursing on the same campus. Entrance fees can exceed $1 million and monthly fees continue after admission and generally rise over time. The relevant comparison is not with the national average CCRC or your local senior housing market. The comparison should be with the full cost of maintaining an upscale home, buying private services and care à la carte, and accepting the management burden and uncertainty that accompany aging in place. For wealthy households, the attraction of a top-tier CCRC is less about saving money than purchasing coordination and reducing future decision risk. For example, a comprehensive “Type A” contract may charge more upfront while limiting some later increases when care needs escalate; other contracts place more of the future care cost on the resident. Couples may value the ability to remain on one campus when their health needs diverge, and adult children may value having an established care system rather than becoming the family’s unpaid emergency logistics department. I must briefly add that luxury finishes and a strong social calendar do not guarantee institutional durability. A large entrance payment is often not the same as buying titled real estate, and a promised refundable portion may leave the resident or estate in the position of an unsecured creditor if the operator fails.
Planning for a high-end CCRC should therefore look more like evaluating a long-duration investment and insurance contract than choosing a resort. Prospective residents should consider reviewing audited financial statements, debt-service coverage, occupancy, reserves, capital-improvement obligations, fee-increase history, regulator filings, refund triggers, refund timing, and the priority of resident claims in a restructuring. They should model entrance and monthly fees under inflation, the cost of moving to higher care levels, potential tax treatment, and the effect of a delayed refund on the estate. It is also prudent to preserve liquid assets outside the entrance fee rather than allowing the sale of the peak home to become a single concentrated wager on one operator or residence. At this end of the market, affordability means more than having enough money to enter. It means retaining enough flexibility to leave, absorb fee increases, fund contingencies, and protect the rest of the household’s plan.
Lastly, I cannot in good conscience talk about housing without bringing up renting (or the pejorative “throwing money away,” as though mortgage interest, property taxes, insurance, maintenance, transaction costs, and the new roof are treasured family heirlooms). Full disclosure, I suggest to my better half (er, third) every so often that we might consider selling our home and becoming renters – so this is a topic I think should warrant consideration, even if you don’t go in this direction for housing. To be sure, ownership can build wealth through forced saving, leverage, appreciation, and stable tenure. It can also concentrate a household’s assets in one illiquid asset, expose the owner to large surprise costs, and make relocation expensive. Renting buys housing services, flexibility, and the transfer of major repair risk to a landlord. That can be the better bargain for someone likely to move within several years, working in a volatile industry, carrying high-interest debt, lacking an adequate emergency reserve, living where price-to-rent ratios are high, or valuing mobility more than renovation rights. The credible rent-versus-buy calculation compares complete costs over a realistic holding period. Buyers should include the down payment’s opportunity cost, closing and selling expenses, mortgage interest, taxes, insurance, maintenance, association fees, and the risk that appreciation disappoints. Renters should include likely rent increases, moving costs, renter’s insurance, and the discipline required to invest savings rather than allowing the financial savings to evaporate into upgraded dinner options and fancier shoes (not that I am judging!). To be clear, neither renting nor buying assures wealth creation. Renting can be strategically sound without being broadly affordable; those are separate claims.
Generational affordability is ultimately shaped by both timing and policy. Earlier cohorts faced recessions, global conflict, inflation, and occasionally very high borrowing costs; later cohorts face larger real price burdens, constrained supply, student debt, delayed family formation, and an older generation holding substantial housing equity. The most consequential divide is often not Boomer versus Millennial but owner versus non-owner – and, maybe, whether one’s parents can help bridge the gap.
Planning cannot create inexpensive land or lower interest rates, but it can improve the odds of being able to afford your house. Individuals can preserve flexibility, match housing to the season of life, maintain liquidity, and evaluate total costs. Families can discuss inheritances, caregiving, co-residence, and housing transitions before urgency removes good choices. Communities can allow more small homes, create accessible and transit-connected housing, preserve affordable rentals, support first-generation buyers without inflating demand alone, and expand the range between a detached house and an institution. The objective (in my view) is not universal homeownership. It is a housing system in which a starter home can still start something, a peak home does not crowd out every other goal, a retirement home supports rather than dictates aging, and renting can be a respectable tenure rather than a waiting room for adulthood.
With all of that said, housing will likely never be simple, because it sits at the intersection of money, family, health, geography, and identity. But it can be planned and analyzed more intelligently or more thoroughly. The best home is not necessarily the one with the highest resale value. It is the one whose costs, risks, and usefulness fit the life being lived – and maybe leave enough financial oxygen for the life still to come. Most of my clients have experienced one or all of the above scenarios and decisions. Writing this week’s Whiteboard was intended to address and combine many of those conversations over the years into one piece. And, while I have only provided a light dusting of information, know that I would be happy to discuss further at any point. In the meantime… happy house hunting!
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