The dream of owning a home is being delayed for millions of Americans, with new data revealing the median age of a first-time homebuyer has reached an unprecedented 40 years old. This significant milestone highlights a deepening affordability crisis that is reshaping the nation's housing market and altering traditional paths to financial stability.
A report from the National Association of Realtors (NAR) paints a stark picture of the challenges facing new entrants into the market. The findings show a rapid increase in the age of first-time buyers, which stood at 36 just three years ago and was 28 in 1991, signaling a fundamental shift in who can afford to purchase a home in the current economic climate.
Key Takeaways
- The median age for a first-time homebuyer in the U.S. has climbed to a record high of 40.
- First-time buyers now represent only 21% of all home purchases, a historic low.
- The typical down payment has risen to 10%, a level not seen since 1989.
- A 10-year delay in purchasing a home could result in a potential loss of $150,000 in equity over a lifetime.
An Unprecedented Shift in Homeownership
The journey to homeownership has become progressively longer and more difficult. The NAR's 2025 Profile of Home Buyers and Sellers, which analyzed transactions between July 2024 and June 2025, confirms a steady and accelerating trend. The median age for a first purchase was 33 in 2020, rising to 36 in 2022, 38 last year, and now 40.
Jessica Lautz, deputy chief economist at NAR, described the figure as "kind of a shocking number," noting the steep climb has occurred primarily in recent years. This delay means that a typical first-time buyer is now closer in age to being eligible for early Social Security withdrawals than they are to their high school graduation.
Furthermore, the participation of first-time buyers in the overall market has dwindled significantly. They now account for just 21% of all home sales, a dramatic drop from nearly 50% in 2007. This decline has profound implications for wealth creation, as home equity is a primary source of net worth for many American families.
The Cost of Waiting
According to estimates from the National Association of Realtors, delaying homeownership by a decade could cost an individual approximately $150,000 in lost equity on a typical starter home over their lifetime. This illustrates the long-term financial consequences of being priced out of the market.
The Financial Hurdles Facing New Buyers
Securing a home in today's market requires substantial financial resources. The typical down payment for a first-time buyer has reached 10%, matching the highest level recorded since 1989. This presents a major obstacle for those trying to save while managing other costs like rent and student loan payments.
To meet these demands, buyers are drawing from various sources:
- 59% use personal savings.
- 26% tap into financial assets, such as 401(k)s and other investment accounts.
- 22% rely on gifts or loans from family and friends.
This increasing dependence on familial wealth underscores a growing gap between those with financial support and those without, making entry into the housing market a matter of generational wealth for a significant portion of the population.
"The historically low share of first-time buyers underscores the real-world consequences of a housing market starved for affordable inventory," said Jessica Lautz.
A Widening Generational Divide
The data reveals a bifurcated market where younger buyers struggle while older, established homeowners are in a much stronger position. The median age of repeat buyers is now 62. Many of these buyers can leverage equity from previous home sales to make larger down payments, and a substantial 30% are able to purchase their next home entirely with cash.
This dynamic creates a competitive environment where a 40-year-old first-time buyer is often competing for the same limited supply of starter homes as a cash-rich buyer who is decades older. This competition further drives up prices and pushes entry-level properties out of reach for many aspiring homeowners.
Changing Household Demographics
The housing crisis is also reflected in household composition. The NAR report found that only 24% of homebuyers have children under the age of 18 living at home, another all-time low. Additionally, the trend of multigenerational living appears to be receding slightly, with the share of buyers purchasing homes to accommodate aging parents or adult children dropping from 17% in 2024 to 14% this year.
Broader Societal Impacts and Policy Calls
The challenges in the housing market have brought the issue of supply to the forefront of national policy discussions. Experts argue that the root cause of the affordability crisis is a persistent and severe shortage of available homes for sale.
Shannon McGahn, NAR's executive vice president and chief advocacy officer, emphasized the need for immediate action. She called for a multi-pronged approach to address the inventory shortage, including policies that encourage the sale of existing homes, revitalize underused commercial properties for residential use, and streamline restrictive zoning and permitting processes.
McGahn also highlighted the potential of modern construction methods to build affordable homes more quickly.
"For generations, access to homeownership has been the primary way Americans build wealth and the cornerstone of the American Dream," McGahn stated. Without significant policy changes to boost housing supply, she warned that this cornerstone of American society may continue to move further away for an entire generation.
As the age of first-time homebuyers continues to climb, the pressure mounts on policymakers to find viable solutions that can restore balance to the market and reopen the door to homeownership for more Americans.
