UPDATE: New findings reveal the median age of first-time homebuyers has surged to an all-time high of 40 years, highlighting a growing crisis in housing affordability. This alarming trend, reported by the National Association of Realtors (NAR), marks a significant increase from 33 years in 2021, and is the oldest average recorded in over four decades.
The implications are staggering. Just 21% of home purchases last year were made by first-time buyers, a sharp decline from the typical 40%% before 2008. This shift indicates that young adults are facing unprecedented challenges in accessing the housing market, pushing them further from achieving the American Dream.
Jessica Lautz, NAR’s deputy chief economist, emphasizes the consequences: “Today’s first-time buyers are building less housing wealth and will likely have fewer moves over a lifetime.” This divide creates a stark contrast between seasoned buyers, who leverage substantial equity for larger down payments and all-cash offers, and first-time buyers struggling to enter the market.
The report reveals a troubling sentiment among younger generations, with fewer than 40% of adults under 30 believing homeownership is achievable. In contrast, nearly 70% of those over 65 retain faith in the possibility of owning a home, according to Pew Research. The loss of a decade in homeownership could mean missing out on approximately $150,000 in equity on a typical starter home.
NAR’s executive vice president, Shannon McGahn, stresses the urgent need for policy changes to tackle the root causes of this affordability crisis, particularly the inadequate housing supply. The report also highlights that the median down payment has risen to 19%, the highest in decades, making it increasingly difficult for young buyers to save.
The trend is compounded by soaring rents and student loan debt, further straining efforts to gather the necessary funds for a down payment. In a striking statistic, all-cash purchases have reached a record 26% of transactions, underscoring the dominance of repeat buyers who can use equity to bypass elevated mortgage rates.
Among first-time buyers, 59% report personal savings as their primary source for down payments, while over 20% relied on financial assistance from family or friends. Additionally, the share of buyers with children under 18 has plummeted to a historic low of just 24% of recent buyers, down from 58%% in 1985.
This crucial report, based on survey data from July 2024 to June 2025, paints a stark picture of the current housing landscape, highlighting the urgent need for action to support aspiring homeowners. As the crisis deepens, all eyes remain on policymakers to implement effective solutions to restore faith in homeownership for future generations.
