The average age of homebuyers in the US has reached a record high, and the trend speaks volumes about the financial hurdles younger generations face when entering the housing market.
A report just released from the National Association of Realtors reveals that the average age of homebuyers has climbed to 56 years-old, up from 49 just last year. This six-year jump highlights the increasing difficulty young Americans are facing in purchasing homes amid skyrocketing prices and mortgage rates. In addition, the median age of first-time buyers has also risen, from 35 to 38, and the share of first-time buyers has dropped to 24%, the lowest recorded since 1981.
In the early 2010s, the average age of homebuyers was in the low-to-mid 40s. But today, younger buyers are being edged out, facing a market where rising ownership costs and intense competition make homebuying a distant dream.
Why Younger Generations Are Struggling To Buy Homes
The challenges younger buyers face are largely due to rising home prices and higher mortgage rates. According to NAR data, as cited by Winters, the median home price is now $435,000 — a 39% increase since 2020 — while the average 30-year fixed mortgage rate has more than doubled to over 6%. With these steep figures, first-time buyers are finding it increasingly challenging to save for a down payment, especially when facing additional pressures from high rent, student loans, and wages that often start lower in early careers.
For context, putting down 18% (the median down payment) on a $435,000 home requires $78,300. This amount nearly matches the U.S. median household income of $80,610, illustrating just how tough it can be for young buyers to amass a substantial down payment.
Older Buyers’ Advantage
The competition doesn’t end there. Younger buyers often find themselves outbid by older, wealthier buyers who can leverage the equity from their existing homes. With greater financial resources, these buyers can more easily afford homes without needing to absorb as many costs upfront. All-cash buyers, who now represent 26% of all home purchases (up from 20% last year), pose yet another challenge to young buyers who rely on traditional financing.
To cope with these financial pressures, nearly a quarter of first-time buyers have had to rely on gifts or loans from family or friends to afford their down payments.
What This Means for the Future of Homeownership
The current landscape suggests a shift in the typical homebuying journey for younger generations, who now must save more and wait longer to buy their first home. As housing affordability challenges continue, homeownership for millennials and Gen Zers remains a formidable goal.
At Legacy Real Estate, we understand these challenges and are here to help clients navigate the housing market, offering insights, expertise, and resources tailored to your unique needs. Let us guide you through today’s complex real estate market—whether you’re just starting out or looking for your next opportunity.
If you have questions about the market or need help preparing for a future home purchase, reach out to us today!
Source:
Winters, Mike. The average age of U.S. homebuyers jumps to 56—homes are ‘wildly unaffordable’ for young people, real estate expert says. cnbc.com, Nov 2024.
