The 17-year-old and two other males stole £3,900 cash, a necklace, designer watch and other items after using a sledgehammer to smash their way into the secluded bungalow, in Harden Road, Harden, Walsall, at around 10.10pm on November 28 last year.
Wolverhampton Crown Court heard that the victims were left terrified by their ordeal and told officers they feared for their lives. The 67-year-old male victim suffered serious cuts to his arm which required surgery.
The court heard he struck the defendant with an ornament during a scuffle and was struck a number of times with the machete by the youth, who was aged 16 at the time.
The intruders were at the premises for between 20 to 30 minutes and knew what they were looking for. The intruders wore face coverings, but the police were able to identify the defendant by his hat which came off.
Sentencing the teen, Judge Simon Ward said: "They were sitting at home minding their own business when they noticed someone trying to smash their way in through the front door. They thought a sledgehammer was used. He tried to lock the door because he foresaw what was happening, but the glass shattered hitting him in the face.
"His wife thought a knife was waved around. One of your group shouted to them that they wanted the safe key.
"Threats were issued. She was hysterical.You were armed with a machete as was another man in your party, while another had a knife. He faced an overwhelming force and thought he would be killed and told you to take whatever you want.
"It is clear to me that they have suffered the psychological effects of what you and the people you were with did, breaking into their house and threatening them like that for a prolonged time. They had hoped to live there perhaps for the remainder of their days, they cannot do that now. They have moved out."
Judge Ward also said the youth's actions appeared to have "something to do with cannabis".
Mr Simon Phillips, mitigating, said the youth had no previous convictions and had done a "terrible thing".
"He wrote a letter of remorse to the victims. He knows that he has to be punished severely today. His family is resigned to it.
For aggravated burglary and for wounding with intent the youth, of Smethwick, who cannot be named for legal reasons, was detained for four and a half years on each count to be served concurrently, minus 65 curfew days. He must serve half before being released on licence with conditions.
The judge said had he been an adult the sentence would have almost certainly been double.
There was no order for compensation due to his lack of means. He must pay the victims' surcharge.