Lead
High home prices and elevated mortgage rates have pushed many prospective buyers out of the market, according to a new National Association of Realtors report released this year. In the 12 months ending in June, first-time buyers purchased roughly one in five homes — a record low and about half the share seen a generation ago. The report also finds the average first-time buyer is now 40, while the typical buyer in today’s high-priced environment is closer to 59. The shift is creating a bottleneck as long-term owners hold low-rate mortgages and homes for longer.
Key Takeaways
- First-time buyers made about 20% of home purchases in the 12 months ending June, the lowest share on record.
- The average age of first-time buyers reached 40, an all-time high, while the typical buyer’s age is roughly 59.
- Homeowners are staying put a record average of 11 years, reducing turnover and inventory for new buyers.
- High mortgage rates plus steep prices make renovation-necessary properties unaffordable even in some below-average markets like Minneapolis.
- Rising living costs and existing debts, including student and medical loans, are delaying many buyers’ ability to save for down payments.
- Buyer caution is rising amid economic uncertainty; some couples pause searches after repeated bidding losses or job worries.
Background
The National Association of Realtors (NAR) publishes an annual profile of home buyers and sellers and periodic research on market trends. This year’s data paints a market where long-term owners with legacy low-rate mortgages move far less frequently, tightening supply. That reduced turnover comes as mortgage rates rose from historic lows in recent years, keeping monthly payments high even if nominal prices moderate in some areas.
Historically, first-time buyers accounted for a substantially larger portion of sales; a generation ago that share was roughly double today’s level. The combination of limited starter-home inventory, higher carrying costs and rising prices for essentials means many younger households face a tougher path onto the housing ladder. Policymakers, lenders and builders have each pointed to different levers — from supply-side construction to down-payment assistance — as potential remedies.
Main Event
The NAR report released this year found first-time buyers accounted for about one in five home purchases over the latest 12-month period ending in June, marking a record low. The report also highlighted demographic shifts: the mean age for all buyers sits near 59 in the current market while first-time buyers average 40 years old, the highest on record. Analysts say these numbers reflect both aging owners who remain in place and younger households who delay entry.
Personal stories in the report and accompanying coverage illustrate the trend. In Minneapolis, a 30-year-old couple, Eve and Cael Burdick, said properties they could afford often require costly repairs they cannot finance, or are priced well above their budget. They described student and medical debt and a recent period of unemployment as setbacks that pushed their expected purchase horizon from about a year to several years.
In Richmond, Virginia, another couple in their mid-30s said repeated bidding wars during the low-rate era kept them out of the market, and current inflation and job risk make them reluctant to stretch into a mortgage they could not sustain. Observers point to both supply constraints and affordability pressures as contributing factors: fewer starter homes are changing hands while potential buyers face higher entry costs.
Analysis & Implications
The fall in first-time buyer share has broad implications for household wealth accumulation and long-term inequality. Homeownership is a primary channel for household net worth growth for many Americans; when young adults are delayed or blocked from buying, the timing and magnitude of wealth transfers across generations shift. That can affect retirement preparedness and savings trajectories over decades.
On the market side, longer owner tenure reduces inventory, which feeds into price pressure, especially at the lower end where first-time buyers compete. Even modest reductions in turnover can materially change supply dynamics because starter-home transactions historically form a large share of market churn. Builders responding to higher-construction costs and zoning constraints have not produced enough truly affordable entry-level units to offset that decline.
Policy responses carry trade-offs. Subsidies or down-payment assistance can help some households enter the market but may also push prices up if supply remains constrained. Supply-side measures — zoning reform, speeded permitting and incentives for smaller units — take time to enact and to deliver new stock. Lenders and mortgage programs can innovate with credit overlays and flexible underwriting, but risk management and investor expectations constrain widespread change.
Comparison & Data
| Metric | Most Recent | Rough Comparison (Generation Ago) |
|---|---|---|
| Share of sales to first-time buyers | ~20% (12 months ending June) | ~40% (approx. one generation earlier) |
| Average age, first-time buyers | 40 years (all-time high) | Younger historically (mid-to-late 20s to 30s) |
| Average tenure of sellers | 11 years (record) | Shorter historically (often 5-7 years) |
The table summarizes headline metrics from the NAR findings and commonly cited historical benchmarks. Together these data points show both a demographic shift in who is buying and a structural decline in turnover that amplifies affordability problems. Regional variation remains important: some metro areas with lower prices or different supply dynamics still enable earlier entry for younger buyers.
Reactions & Quotes
Housing analysts and NAR officials frame the findings as a symptom of constrained supply and affordability challenges rather than a single-cause crisis. They emphasize the need for coordinated policy and private-sector responses to restore a more accessible ladder into homeownership.
“We see gridlock in today’s housing market,”
Jessica Lautz, Deputy Chief Economist, National Association of Realtors (NAR)
Advocates for younger buyers stress the role of rising living costs and debt burdens in delaying purchases, while builders and local governments point to zoning and construction costs as barriers to delivering more starter homes. Lenders note underwriting standards and risk profiles have also evolved since the pre-2008 period.
“There is no feasible way that we could buy a house for $350,000 and then pull a home-equity line of credit to drywall the basement,”
Eve Burdick, prospective buyer, Minneapolis
Public officials in some regions have responded with targeted programs for first-time buyers; others have prioritized planning reforms. The debate continues over which mix of interventions will best increase sustainable access without inflating prices in the short term.
Unconfirmed
- Exact contribution of investor purchases vs. owner-occupant behavior to the decline in starter-home inventory is not definitively apportioned in the report.
- How much short-term policy fixes (e.g., buyer subsidies) would raise prices if supply remains constrained is subject to modelling assumptions and therefore not settled.
Bottom Line
The NAR findings point to a structural problem: fewer young and first-time households are entering homeownership while older owners remain in place, creating a tighter market at the entry level. That dynamic, compounded by high mortgage rates and higher costs of living, means many prospective buyers will face delayed timelines for building home equity.
Solutions will need to combine short- and long-term actions: targeted assistance and flexible financing can help some households now, but materially improving access requires increasing the supply of affordable starter homes and addressing local land-use and construction-cost barriers. Policymakers and market actors will need to weigh speed, scale and unintended effects as they act.
Sources
- NPR (media report summarizing interviews and the NAR findings)
- National Association of Realtors (NAR) (official research and annual buyer/seller profile)