UPDATE: The median age of first-time homebuyers in the U.S. has surged to an all-time high of 40 years old, according to a new report from the National Association of Realtors (NAR). This alarming trend, revealed today, highlights a dramatic shift in the housing market that is shutting younger individuals out of homeownership.
Affordability challenges are pushing the typical first-time buyer to an age not seen in over four decades, rising sharply from 33 in 2021. The report indicates that only 21% of home purchases are now made by first-time buyers, a stark contrast to the 40% rate seen before the 2008 financial crisis.
“The implications for the housing market are staggering,” stated Jessica Lautz, NAR’s deputy chief economist. “Today’s first-time buyers are building less housing wealth and will likely have fewer moves over a lifetime as a result.” As these buyers struggle to enter the market, the divide between them and seasoned homeowners continues to widen, creating a “tale of two cities” within the real estate landscape.
This growing disparity is fueling skepticism among young adults about the American dream. A recent Pew Research survey shows that less than 40% of adults under 30 believe homeownership is attainable, while nearly 70% of those over 65 maintain hope. The consequences are dire; waiting until 40 instead of 30 to purchase a home could cost buyers approximately $150,000 in equity on a typical starter home.
NAR’s Shannon McGahn emphasized the urgent need for policy changes to address the fundamental causes of the affordability crisis. “We must focus on policies that address the root cause of the affordability crisis: inadequate housing supply,” she urged.
The report also highlights other pressing issues contributing to the crisis, such as skyrocketing rents and overwhelming student loan debt. The median down payment for first-time buyers has now reached 19%, the highest in decades, making it even more challenging for young people to save. Additionally, all-cash purchases are at a record high, comprising 26% of sales in the past year, a trend largely driven by repeat buyers who can leverage their existing equity.
For first-time buyers, personal savings remain the primary source of down payment funds, with 59% relying on their savings. However, over 20% of these buyers are receiving financial assistance from relatives or friends through gifts or loans.
Another significant shift in the market is the declining share of buyers with children under 18, now at just 24% compared to 58% in 1985, reflecting changing societal norms and economic realities.
The NAR’s latest profile of buyers and sellers report is based on survey data covering transactions from July 2024 to June 2025. As the housing market continues to evolve rapidly, potential first-time buyers and policymakers are urged to pay close attention to these developments. With the future of homeownership hanging in the balance, immediate action is necessary to bridge the gap for younger generations aspiring to achieve their dreams.
Stay tuned for ongoing updates as this situation develops.
