The Rising Age of Homebuyers: A Shift in the US Housing Market
The average age of homebuyers in the United States has risen significantly, reaching a historic high of 56, according to the National Association of Realtors’ annual state-of-the-market report. This trend, accelerating since July 2023, is a stark indicator of the increasing difficulty younger Americans are facing in the housing market. The median age of first-time buyers also rose from 35 to 38, marking the lowest share of first-timers since NAR started tracking the metric in 1981.
A Broader Challenge for Younger Homebuyers
High homeownership costs are particularly challenging for younger buyers, who often face obstacles such as saving for a down payment, managing student loan debt, and juggling high rents and low wages. The median down payment amount—around 18%—on a $435,000 home is $78,300, which is nearly equivalent to the annual U.S. median household income of $80,610. This financial burden makes it even harder for millennials to enter the housing market.
Moreover, younger buyers often find themselves outbid by older, wealthier individuals who can draw on equity from previous home ownership. Younger buyers trying to compete without this advantage often end up absorbing additional costs out of pocket.
Competition from Wealthier Buyers
The shift is also apparent in the growing share of wealthier homebuyers using all-cash and relying on gifts or loans from relatives. The percentage of all-cash home purchases has risen from 20% to 26% in the past year alone, further exacerbating the struggle for younger buyers.
Experts on the Difficulty for Millennials
Bob Driscoll, senior vice president and director of residential lending at Rockland Trust, shared, "In my two decades in the mortgage business, I’ve never seen a more difficult time for millennials to purchase a home." This sentiment is echoed by Noah Damsky, a chartered financial analyst and principal at Marina Wealth Advisors, who highlighted the affordability issues for the younger generation.
Damsky noted, "Saving for a down payment can be challenging without an oversized income… And a median income only covers the bare necessities, which is why a higher income or existing wealth is critical to becoming a homeowner."
Key Statistics for 2024
- Median Age of Homebuyers: 56
- Median Age of First-Time Buyers: 38
- First-Time Buyers Share: 24%
- First-Time Buyers in 1981: 32%
- Median U.S. Home Price: $435,000 (up 39% since 2020)
- 30-Year Fixed Mortgage Rate: Over 6% (more than doubled since 2020)
- Share of All-Cash Buyers: 26%