First-time homebuyers are now older than ever as the housing crisis deepens
First-time homebuyers in America are hitting an unprecedented milestone, and it’s not one they’ll be celebrating.According to the latest data from the National Association of Realtors (NAR), the median age for first-time buyers has surged to 38 — the oldest on record and up three years from just last summer.
Gone are the days when 20-somethings snagged their first slice of the American dream.Back in the 1980s, first-time homebuyers were typically in their late 20s.
Now, the dream of homeownership feels more like an uphill battle, thanks to a perfect storm of skyrocketing prices, dwindling housing supply and cutthroat competition from buyers with deeper pockets.“The first-time homebuyer who can enter into today’s market is older, has a higher income [and] is wealthier,” Jessica Lautz, deputy chief economist at NAR, told CNBC.
Simply put, today’s buyers need more financial muscle to cover those jaw-dropping down payments.This year, only 24% of home purchases were by first-time buyers — the lowest share since NAR began keeping track in 1981.
With a staggering housing shortage estimated at 4 million homes and relentless price inflation, it’s easy to see why younger generations are feeling boxed out.“The biggest issue of housing today” is this shortage, Orphe Divounguy, senior economist at Zillow, pointed out to the outlet.
Some construction gains were made recently, with single-family home projects seeing a 2.7% uptick in September, but the housing market remains under severe pressure.The price of a typical starter home rose to $250,000 in August, up from $240,000 the year before, according to Redfin.
Homeownership has largely become a game for repeat buyers who can tap into their existing home equity, often sidestepping mortgage struggles altogether.About 26% of buyers this year paid for their homes in cash — an all-time high, says NAR.
This trend has left younger adults watching from the sidelines while baby boomers and retirees solidify...