High home prices and elevated mortgage rates are keeping many people from getting onto the housing ladder. A new National Association of Realtors report found the share of homes bought by first-time buyers fell to a record low over the past year.
The shift is visible even in the pictures the Realtors used for their annual profile: planners replaced a photo of a young, expecting couple with an image of an older pair because the typical buyer today is much older. The average buyer’s age now is 59, and among first-time buyers the average is 40 — an all-time high.
First-time buyers accounted for only about one in five home purchases in the 12 months ending in June, roughly half the share seen a generation ago. Jessica Lautz, deputy chief economist at the Realtors’ association, says the trend underscores serious problems: there simply aren’t enough homes that younger adults can afford, blocking them from building the biggest financial asset many people ever own.
Part of the squeeze comes from existing homeowners staying put. Many hold mortgages with much lower interest rates than are available today and have extended their time in their homes — an average of 11 years, a record high. Fewer listings mean fewer opportunities for new buyers.
At the same time, broader costs of living and existing debts make saving for a down payment harder. For some would-be buyers, student loans, medical bills and lost wages have put homebuying further out of reach.
Take Eve and Cael Burdick, a Minneapolis couple who just marked their first wedding anniversary. Both are 30, and despite living in a market where prices run below the national average, every house they can afford needs more renovation than they can manage. Eve says there is no realistic way to buy a $350,000 house and then rely on a home-equity line to finish major projects. Her parents owned a home by this age, she notes, but that path seems less common now.
The Burdicks are paying down student and medical debt, and Eve had an extended spell out of work that drained their savings. What once felt like a one-year timetable for buying a home now looks like three or four years — meaning they may not become homeowners until their mid-30s.
Sasha Skelton and her partner are in their mid-30s and both work full time — she in HR at a bank, he in property management. They were frequently outbid during an earlier buying season and, now facing higher rates and pricier listings in their Richmond suburb, have paused their search. Job and economic uncertainty, plus rising grocery and other living costs, make them wary of committing to a mortgage they might not be able to sustain.
Skelton, who grew up moving around as an Army brat, still hopes to settle down someday. But for now, the market’s affordability gap and lack of inventory mean many potential buyers are waiting longer to buy or are pushed out entirely.
Policymakers and market participants point to two central challenges: increasing supply of affordable starter homes and addressing the financial barriers that make saving for down payments and qualifying for loans difficult. Until those issues are tackled, the average buyer will likely keep getting older and first-time buyers will remain a smaller slice of the market.