First-Time Buyers Average Age a Troubling Statistic

Stats from NAR shows the age of first-time homebuyers keeps rising. Yes, it’s a problem.

The stat actually reflects the greater problems of the economy and the population, that life is becoming unaffordable for most, and that few politicians and corporations are willing to do anything about it. Systemically, high home prices, low supply, high mortgage rates, low wages, and credit issues make it increasingly difficult for younger buyers in particular.

There are many people buying new and resale homes, some of which are above 40 years of age, which is excellent. However, young buyers purchases often lead to an array of expenditures which aid the economy. Things such as furniture, financing, furnishings, kids wear and appliances add a lot to boost economic activity. Younger buyers start families which entails schools, transportation, medical services, groceries, clothing, and more.

Many Americans of all ages want to buy a home yet younger buyers want to start families and they typically spend much more which in turn propels the economy.  Of course, we’re in a troubling long-term economic funk, where governments are using deficit spending to compensate for their bad decisions. Keeping interest rates high is one of those bad decisions.

As you can see in this report below, younger buyers haven’t given up their dreams of a happy, stable life, with a house as a physical foundation. They’re suppressed for sure, with some resigning, but the value of owning a home doesn’t go away.  They’re ready to capture that value, if it ever does appear.

It’s Healthy and Wise to Want to Own a Home

Their desire to own a home is healthy and wise. They’ve never been coached but they instinctively know that buying a home is the number one way to protect their financial future and a long-term winning life strategy. The World Economic Forum host of most political folly, says “people will own nothing and be happy”. Ask any renter facing homelessness whether that’s true and you’ll get a derisive response to that statement.

Home buyers get no sympathy from local and state governments. You know about the price, land use regulations, low supply, and that builders are primarily building for the rich. And then there’s the hi-rise condos downtown that no one actually wants to live in.

The good old American dream has taken a beating and home ownership is one expectation that few may fulfill at current home prices. The state of the market, mortgage rates, and regulations on building must change if Gen Z’s and Millennials are going to achieve their cherished life goals. Homeownership isn’t frivolous, it’s one of the very few ways left to build wealth. High wages and stocks are dominating by the wealthy classes. Paupers can’t buy houses.

The key for the Trump regime is to make homeownership universal in America. Let’s hope he’s on the right track.

NAR’s Profile of Home Buyers and Sellers

NAR published a report on 167,500 people in the US last fall that showed the average age of first-time home buyers rose year over year from 35 to 38, and the average of repeat home buyers age rose from a staggering 58 to 61 years.

For all buyers, the average age jumped from 49 to 56 years. Young buyers felt they wouldn’t be able to buy until 40, but 1 in 4 believe it will never happen.

45 years ago, in 1980, the average age for first-timers was 30 years. While it’s 8 years higher, property values and interest rates are much higher today and credit-worthiness is much more stringent too. Average home prices today are 7 times that of 1980.  If it weren’t for the bank of mom and dad, that first-time buyer age would be much higher.

The share of first-time buyers in the market also shrunk to a historic low of 24%. One look at the mortgage payments, credit qualification, home price and down payment, and it was confirmed, buying a house is a far-off dream.

The Economy has Been Disappearing to the Left

The point to make here is that President Trump still doesn’t see the housing market as a priority. He believes that in removing the illegal migrants, that supply will suffice. But he’s not taking into account the latent demand from young home buyers, and some of the Millennials are getting toward middle age. Will they have enough time ahead to pay off a million dollar house?

The average first-time homebuyer’s income is $108,800 while repeat buyers income was $114,300. Of course, many of the latter older buyers likely have greater savings and home equity for that next home purchase. First-time buyers paid 9% downpayment while repeat buyers paid 18%.  74% of buyers financed their home yet face the risk of higher interest rates on refinancing. The issue with those who have been renting is an inability to save and the presence of large credit card debt and student loans. The financial strain and events inevitably results in bad credit ratings, making the dream very distant.

If you’re a Realtor on the other hand, you need to reach this group online and help them find a path. Because this group of buyers will be enabled in the next 5 years.

Personally, I believe President Trump’s initiatives on the US economy and jobs will be great, for a 2026 start. He’s thinking that by deporting millions of illegals, properties will be freed up. Demand remains intense though, so prices may not fall as much as buyers want, nor mortgage rates fall well down. Affordability will be tough, until builders can really push ahead.

With reindustrialization, there is a host of new cities that will grow strong and young people will be on the move to those cities and states.  These states will have fewer regulations and more interest in building homes.

So part of the solution might be the mobility of young buyers. As one of those buyers, are you willing to go where you might have a job and own a home? Because staying put where you are likely offers the poorest likelihood.

We might as well discuss the effect of the tariffs on the housing market too. There’s a good chance we could see prices fall this year, but next year, as Trump’s various bills go into action, bids on homes will be rising.

When is the best time to buy? This summer between July and October might be the best time to buy.  This spring is a good time to sell a house with the largest numbers of buyers out hunting for a home.  See these tips for selling your home.

Let’s Take a Closer Look at NAR’s Buyer Profile Findings

NAR’s most recent Buyer Profile Report found some interesting insights into how buyer’s finance, shop and what they decide on. It seems there is much in the way of education and help they want and need in their homebuying journey. That makes real estate content marketing and real estate SEO vital for Realtors.

• First-time home buyers in the last year shrunk to an historic low of just 24% of all buyers vs an historic norm of 40%.
• In the last two years, first-time home buyer household income has grown by $26,000
• This year’s report shows that the median household income of first-time home buyers was $97,000.
• first-time home buyers’ median age reached an all-time high of 38 years old, up 10 years from the late 80s
• The typical downpayment for first-time buyers was 9%, which is the highest share since 1997.
• Nine% of all buyers were born outside the U.S., which is true for 13% of first-time home buyers.
• First-time home buyers decreased to 24% of the market share (32% last year). This year now marks the lowest share since NAR began collecting the data in 1981
• primary reason for purchasing a home was the desire to own a home of their own. For first-time buyers, this number jumps to 64%.
• First-time buyers, in particular, found understanding the process and steps to be a significant challenge at 36%. Ø Additionally, 32% of first-time buyers cited saving for a downpayment to be the most difficult step
• 51% of first-time buyers relied on referrals from their personal network to find a Realtor.
• 80% reporting that their agent’s assistance in understanding the process was invaluable.
• First-time buyers were more likely to finance their purchase at 91%, while only 69% of repeat buyers financed. Ø The median% financed for first-time buyers was 91%, down slightly from 92%
• Seventy-seven% of first-time buyers, and 60% of repeat buyers use a fixed-rate mortgage.
• 25% of first-time buyers used a gift or loan from a relative or friend for their downpayment, though savings was most common at 69%.

For Realtors, first-time buyers represent the next big group of homebuying clients to target. As more housing is developed and the pressure on the housing market is eased, more of this group will be enabled to buy a home. With respect to building and financing rates to handling down payments for what are pricey properties, the housing market forecast looks challenging.  First-time home buyers will need to leverage many assets, resources, and be financially competent to navigate their buying journey successfully.

See more on housing market predictions for the next 5 years and on the current status of the market.