Median Age of First-Time Homebuyers Reaches an All-Time High
In 2024, the median age of first-time homebuyers has hit a record high of 38 years old, according to the National Association of Realtors’ (NAR) 2024 Profile of Home Buyers and Sellers. This marks a significant shift from just a few decades ago when first-time buyers were typically in their late 20s. The NAR’s survey, conducted among 5,390 homebuyers who purchased a primary residence between July 2023 and June 2024, reveals that buyers today are older, wealthier, and generally better positioned to make a purchase in a challenging market.
Factors Contributing to Older First-Time Homebuyers
Several factors contribute to this shift in the age of first-time buyers:
- High Home Prices and Larger Down Payments: Today’s higher home prices require more substantial down payments, which many younger buyers struggle to afford. This financial hurdle makes it harder for younger adults to enter the market.
- Increased Competition: First-time buyers are often competing with wealthier, repeat buyers who have the advantage of home equity and greater financial resources, further limiting opportunities for those trying to buy their first home.
- Housing Shortage: A significant lack of available homes on the market has made it even harder for first-time buyers to find affordable options. The U.S. is facing a housing shortage of approximately 4 million homes, which has driven up competition for available properties.
Declining Share of First-Time Buyers
The share of first-time homebuyers has dropped substantially in recent years. In 2024, only 24% of homebuyers were purchasing their first home, down from 32% a year ago. This is the lowest share of first-time buyers since NAR began tracking this data in 1981. This decline reflects the combined impact of higher home prices, limited inventory, and financial challenges faced by younger buyers.
The Housing Shortage: “The Biggest Issue”
The housing shortage remains a critical issue for the U.S. housing market, with construction not keeping pace with demand. As of mid-2023, the National Association of Realtors reported a deficit of 4 million homes. Although there have been some improvements in building activity—such as a 2.7% increase in single-family housing starts in September 2024—supply continues to lag behind demand, putting upward pressure on home prices.
According to Orphe Divounguy, senior economist at Zillow, “The biggest issue of housing today” is the shortage of affordable homes. If this issue isn’t addressed, experts warn that the housing market could become increasingly out of reach for younger generations, particularly in the long run.
The Impact of High Rent Costs
High rent prices have also played a significant role in pushing first-time buyers to older ages. During the pandemic, rent prices increased faster than wages, with rent growth peaking at 16% in 2022, compared to wage growth of just 9.3%. As a result, many potential homebuyers are spending a large portion of their income on rent, leaving them with less to save for a home.
Renters are also facing higher debt-to-income (DTI) ratios, which makes it harder to qualify for a mortgage. High student loan debt, combined with rising rent costs, squeezes budgets and prevents many from accumulating enough savings for a down payment.
The Dominance of Repeat Buyers
The current housing market is largely driven by repeat homebuyers, who often have the advantage of home equity built from previous properties. In fact, 26% of homebuyers in 2024 paid cash for their homes—an all-time high. These buyers are typically older, with the average repeat homebuyer now 61 years old, according to NAR data.
The wealth disparity between younger first-time buyers and older, more established buyers highlights the challenges of entering the market today. Baby boomers and retirees are benefiting from home equity, which allows them to buy homes outright or at more favorable terms than younger generations.
Looking Ahead: The Future of First-Time Homebuyers
The challenges facing first-time homebuyers today are significant, with older homebuyers, high home prices, limited inventory, and rising rent prices creating barriers to homeownership. If these trends continue, the gap between first-time buyers and repeat buyers is likely to widen, further delaying the ability of younger generations to own homes.
Experts warn that without substantial changes to housing policy and increased efforts to address the housing shortage, many young people may struggle to afford a home, potentially pushing the typical age of first-time buyers even higher in the years to come.