According to data from the National Association of Realtors (NAR), first-time homebuyers are now on average 38 years old, up three years from 2023 and nearly a decade older than buyers in the 1980s.
The median age for all homebuyers reached 56, jumping seven years from 2023’s figure of 49.
Money talks in today’s market, with one-third of home purchases made in cash compared to one-fourth during the late 2010s. Existing homeowners tap their home equity for substantial down payments, outmaneuvering first-timers who must borrow at higher rates.
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The share of first-time buyers fell to 24% of the market – down from 32% last year and well below the pre-2008 level of 40%. A Redfin survey found 40% of current homeowners acknowledge they couldn’t afford their homes at today’s prices.
Location compounds the challenge. High-paying jobs cluster in cities like Boston, New York, San Francisco, San Jose and Los Angeles, where less than 10% of listed homes fall within reach of median-income households.
Family wealth shapes buying power. A Redfin-commissioned survey revealed over one-third of buyers under 30 planned to use family cash gifts for down payments. University of Chicago economists found children of homeowners face better odds of achieving homeownership themselves, according to HousingWire.
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“To reverse these trends, we must address the root causes of unaffordability. That means building starter homes, reforming zoning laws and creating pathways for economic mobility that don’t rely so heavily on homeownership,” HousingWire said.
Most new mortgage holders are young borrowers from diverse backgrounds. While they stand to gain from homeownership’s long-term benefits, many report working longer hours or postponing medical care to afford payments.
The affordability and policy crisis hits hardest in major job markets. Cities with strong employment opportunities show median home prices far exceeding what typical earners can afford, forcing extended rental periods while saving for down payments.
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Cash buyers dominate the landscape as existing homeowners leverage equity gains from recent years. First-time buyers face a triple threat: high prices, elevated interest rates and competition from buyers with ready cash.
The generational wealth gap widens as homeownership becomes more difficult for those without family assistance. Potential buyers lacking inherited wealth or homeowner parents face steeper climbs toward ownership.
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