First-Time Homebuyers Hit Record Low, Median Age Hits 40

The American dream of homeownership is slipping further out of reach for a new generation. First-time homebuyers now account for just 21% of the U.S. housing market—the lowest share since the National Association of Realtors (NAR) began tracking the data in 1981, according to the NAR’s 2025 Profile of Home Buyers and Sellers. The median age of a first-time buyer has risen to an all-time high of 40, up from earlier in the decade, marking a seismic shift in who can afford to enter the housing market.

A 50% Contraction Since the Great Recession

Historically, first-time buyers made up roughly 40% of home sales. That share has now contracted by half since 2007, just before the Great Recession. The decline reflects what NAR Deputy Chief Economist Jessica Lautz calls “the real-world consequences of a housing market starved for affordable inventory.”

“The implications for the housing market are staggering,” Lautz said in the report. “Today’s first-time buyers are building less housing wealth and will likely have fewer moves over a lifetime as a result.”

A Fox News report covering the data described the trend as the American dream “slipping away” as soaring home prices and high interest rates continue to price millions of Americans out of homeownership.

Record Barriers to Entry

The financial hurdles facing first-time buyers have intensified dramatically. Those who do manage to purchase put down a median 10% down payment—matching the highest level recorded since 1989. Repeat buyers, by contrast, put down a median of 23%, reflecting the significant equity advantage held by existing homeowners.

Among first-time buyers, 59% relied on personal savings for their down payment, while 26% tapped financial assets such as 401(k) plans, stocks, or cryptocurrency, and 22% depended on gifts or loans from family and friends.

The age barrier is equally striking. The typical first-time buyer is now 40 years old—a decade older than the historical norm. This delay carries substantial financial consequences. NAR Executive Vice President Shannon McGahn noted that postponing homeownership from age 30 to 40 can mean losing roughly $150,000 in equity on a typical starter home.

“For generations, access to homeownership has been the primary way Americans build wealth and the cornerstone of the American Dream,” McGahn said. “Delayed or denied homeownership until age 40 instead of 30 can mean losing roughly $150,000 in equity on a typical starter home.”

A Tale of Two Housing Markets

The current market is increasingly polarized between the haves and have-nots. Repeat buyers now dominate 79% of all home purchases, with a median age of 62. Fully 30% of repeat buyers paid all cash for their homes, highlighting the chasm between equity-rich existing homeowners and those priced out of the market.

Meanwhile, roughly one-third of adults aged 18 to 35—over 25 million Americans—are living with their parents, according to a June 2026 report from realtor.com. The convergence of high rents, student loan debt, and soaring home prices has created what Lautz described as a perfect storm preventing young adults from saving for a down payment.

“There’s very limited affordable housing inventory,” Lautz said. “High rents, student loan debt, car loans, credit cards, everything is keeping these buyers from being able to save for a down payment and then find that perfect home.”

The Supply Crisis at the Core

Underlying the affordability crisis is a persistent shortage of housing. The U.S. is short approximately 4 million residential units, according to realtor.com research. This deficit has built over years of underbuilding following the 2008 financial crisis, compounded by restrictive zoning, labor shortages, and supply chain disruptions.

The median time homeowners stayed in their home before selling has reached an all-time high of 11 years, further constricting inventory as aging homeowners age in place.

Only 24% of buyers had children under 18 living at home—an all-time low—reflecting both declining birth rates and the aging buyer profile.

What Comes Next

NAR has called for a multipronged approach to address the crisis, including unlocking existing inventory, enabling new construction, streamlining zoning and permitting barriers, and modernizing construction methods.

“Today, we must focus on policies that address the root cause of the affordability crisis: inadequate housing supply,” McGahn said. “These commonsense reforms make homes more affordable, restore opportunity, and help revive the dream of homeownership for generations to come.”

With mortgage rates averaging 6.58% and first-time buyers now required to put down a record-high 10% down payment — matching the highest level since 1989, according to the NAR report — the affordability math remains daunting for prospective buyers. Whether policy interventions or a shift in market conditions can reverse the trend remains an open question—but for millions of young Americans, the dream of owning a home has never felt more distant.