Survey Finds Young Buyers Still Shut Out of Homeownership Without Outside Help

The typical first-time homebuyer remained 40 years old last year, holding at a record level as younger buyers continue to face punishing home prices and interest rates across much of the country.

New figures from the National Association of Realtors show the median age for first-time buyers has now stayed at 40 for a second straight year. In 1991, that figure was just 28.

More first-time buyers are paying all cash instead of using a mortgage, and those buyers are older still, with a median age of 54, said Jessica Lautz, the association’s deputy chief economist and vice president of research. Such purchases often reflect inheritances or other family assistance.

“That’s actually 1 in 10 first-time buyers, so we’re really seeing that generational transfer of wealth,” Lautz said, referring to cash offers. Repeat buyers also reached a median age of 62, another record high, according to the report.

Lautz said the Bay Area near San Francisco remains one of the places where prices are still climbing because of the AI boom, while some Rust Belt markets and states that are building more homes are seeing more affordable conditions.

A realtor.com report ranked Indiana, Iowa, South Carolina, Texas, North Carolina and Nebraska highest for affordability and homebuilding, based on home prices relative to income and new building permits.

At the other end of the list were New York, Massachusetts, Rhode Island, Hawaii and California.

Including cash transactions is one reason the National Association of Realtors’ homebuyer survey shows a higher median age than some other studies, such as the New York Federal Reserve Bank’s review of mortgage applications, Lautz said.

The Federal Reserve puts the median age of first-time buyers at 33 for the first six months of the latest year cited by researchers, said Yanling Mayer, a research economist for the Texas Real Estate Research Center at Texas A&M University. That is roughly unchanged from 2019. By contrast, the Realtors survey, which includes cash purchases, showed the median age rise from 33 in 2019 to 40 over the past two years.

“We’re certainly not brushing aside the challenges facing first-time homebuyers,” Mayer said. “Are they finding other means to achieve home ownership? Help from family, help from friends?”

Several surveys last year generally placed the age of first-time buyers between 35 and 40 and showed that group continuing to get older, said Eric Finnigan, vice president of demographics research for John Burns Research and Consulting.

“The answer is probably somewhere in the middle,” Finnigan said.