The National Association of Realtors’ 2024 Profile of Home Buyers and Sellers reports that the first-time homebuyers’ median age, in the US has reached an all-time high of 38 years from 35 in 2023. Most first-time buyers are entering the market for the first time in their late 20s or older; it’s the first time since the 1980s. All this points to rather tiring challenges characterized by skyrocketing home prices, a lean supply of houses, and growing rivalry among prospective buyers. There are quite a number of factors responsible for this trend.
High home prices keep many first-time buyers out of the market, waiting till they grow older and better off financially with fat down payments. Meanwhile, the share of first-time buyers has fallen by a substantial amount, dipping 8 percentage points from last year and now totaling just 24 percent–the smallest share since the National Association of Realtors started its survey in 1981. Experts agree that the relentless decline in available housing inventory is the key reason the market is moving further away from being one in which more people can buy their first home. It remains the biggest problem with prospective buyers.
As of mid-2024, the shortage stood at four million homes with slow construction and high demand exacerbating that gap. With fewer homes available, prices continue to rise, placing further pressure on those trying to enter the market.
Other factors economists mention as pushing back homeownership include rising rents. That rise has outpaced wage growth in recent years, especially over the course of the pandemic, which saw 2022 rents jump by 16%. While the cost of renting their current home has stopped growing, many are now “cost burdened,” meaning they spend 30% or more of their income on housing. It is harder to save a down payment or pay off existing debt. Most first time-homebuyers hold off a few years longer in renting.
The repeat buyer now makes up much of the current market, most of whom are paying cash using the equity they have accrued in their home. It brings to the light, then, the case of the younger, wannabe homeowner and the long-term impact of the housing crisis that continues unfolding.
