Most of the $17.2T Great Wealth Transfer will happen in just 10 states, LendingTree says — and It could have major consequences for U.S. real estate

However, over 59% of that sum is projected to exchange hands across just 10 states, the report found. Wealth from older homeowners in California, Florida, New York, Texas, Washington, New Jersey, Massachusetts, Pennsylvania, North Carolina, and Arizona added up to $10.2 trillion ⁠of the $17.2 trillion predicted to change hands.

Great Wealth Transfer

Estimates vary when it comes to just how big the Great Wealth Transfer will be. An often-cited figure from research firm Cerulli Associates puts the total amount that will be transferred to heirs at $105 trillion through 2048.

Another projection from Visa Business and Economic Insights estimates that $36 trillion will be passed on by baby boomers to Gen X and millennials heirs over the next 20 years.

LendingTree’s analysis specifically looked at homeowners who were 65 and older at the time of its analysis, and didn’t take into account individuals who will age into this cohort. It also only measured homeowners, and extrapolated their wealth based on home values.

According to the company, California is the state where the most wealth is predicted to be passed down. An estimated $3.4 trillion could be transferred by boomers to their heirs, representing nearly 20% of the national total.

This far surpasses all other states. In fact, the projected totals of the next two highest-ranking states — Florida ($1.6 trillion) and New York ($1.2 trillion) — combined is less than California’s.

“We tend to think of California in terms of technology and entertainment, but it’s also a power in manufacturing, agriculture, trade and other industries. That massive diversified economy has created staggering amounts of wealth,” Matt Schulz, LendingTree’s chief consumer finance analyst, said in the report.

Schulz also warned of the risks that could arise thanks to the great wealth transfer. On one hand, younger generations may be able to use inheritances to pay off debt, buy a home or start a business. But in other cases, wealthy families will simply become wealthier.

“Those without inherited wealth may find it increasingly difficult to build their own,” Schulz said. “The inequality that we see today in our country might just get worse.”

Ripples across the housing market?

A Realtor.com post based on LendingTree’s findings noted that unequal distribution of wealth could have an impact on real estate markets as well.

Hannah Jones, a senior economist at Realtor.com, noted that if someone who inherited money from a Californian were to buy property in a lower-cost market, it would mean “a much bigger relative advantage.”