U.S. Housing Crisis: First-Time Buyers Now Average 40 Years Old
The pursuit of homeownership in the United States is becoming increasingly challenging. New data from the National Association of Realtors (NAR) shows that the median age of first-time homebuyers has risen to 40 years. This represents a significant change from previous years, when the median age was 38 in 2022, 36 in 2021, and 28 in 1991.
Understanding the Housing Crisis
This rise in age highlights a serious housing affordability crisis that is reshaping homeownership in America. Jessica Lautz, NAR’s deputy chief economist, noted that this trend is quite alarming. As access to affordable homes diminishes, many Americans are being barred from the financial benefits that come with owning a home.
As potential first-time buyers reach the age of 40, they find themselves closer to early Social Security eligibility at 62 than to their high school graduation at 18. This shift indicates a substantial delay in achieving homeownership.
First-Time Buyers: A Decline in Market Share
According to NAR’s 2025 Profile of Home Buyers and Sellers, first-time buyers now account for only 21% of all home purchases—an unprecedented low. This figure signifies a 50% decline since 2007. Lautz remarked that this decline reflects the challenges faced in a market lacking affordable housing options.
Financial Barriers for New Homebuyers
Current first-time homebuyers confront numerous financial obstacles. The average down payment has reached 10%, the highest level since 1989. Many buyers depend heavily on personal savings, with 59% financing their purchases this way. In contrast, 26% are utilizing retirement or investment funds, and 22% rely on financial gifts from family or friends.
- Typical down payment: 10% (highest since 1989)
- 59% use personal savings
- 26% access 401(k)s or investments
- 22% receive family support
Repeat buyers, who average 62 years old, are in better financial positions. They often utilize equity from prior home sales, with 30% able to purchase homes outright in cash. This disparity creates a divided market where older homeowners maintain security, while younger buyers are left waiting longer for their opportunities.
Changing Demographics and Trends
The NAR report also reveals a decline in traditional family dynamics among homebuyers. Only 24% of buyers currently have children under 18—a record low. Additionally, the trend of purchasing multigenerational homes has decreased to 14% from 17% in 2024.
This housing crisis has prompted calls for policy changes. Shannon McGahn, NAR’s executive vice president, emphasized the need for strategies to enhance housing supply. Recommended actions include unlocking existing inventory, revitalizing underused properties, and smoothing zoning processes, all aimed at promoting affordable home construction.
If these challenges remain unaddressed, many Americans may find the dream of homeownership increasingly elusive, underscoring its vital role in wealth-building and social mobility.
