First-time home buyers make up the smallest portion of home purchases since the National Association of Realtors (NAR) started tracking the statistic in 1981. At the same time, the age of buyers is on the rise.
First-time buyers dropped to 24% between July 2023 and June 2024. That’s down from 32% a year earlier, according to NAR’s 2024 profile of home buyers and sellers.
“First-time buyers face high home prices, high mortgage interest rates and limited inventory, making them a decade older with significantly higher incomes than previous generations of buyers,” NAR Deputy Chief Economist Jessica Lautz wrote.
The average age of first-time buyers rose to 38 years old from 35 years old. The average age of repeat home buyers reached 61 years old, up from 58 years old. The overall average of all home buyers was 56 years old, up from 49 years old the previous year.
The median household income for those first-timers is $97,000, an increase of $26,000 in the past two years. Without previous home equity to rely on, their down payments average 9%. While well below the golden 20% goal, it’s the highest down payment for first-time buyers since 1997.
Sixty-nine percent of first-time buyers relied on savings for down payments, 25% received loans from friends and family, 21% cashed out financial assets and an all-time high of 7% used inheritance money to close the deal.
Repeat home buyers, however, have more cash to work with, according to Lautz.
“Current homeowners can more easily make housing trades using built-up housing equity for cash purchases or large down payments on dream homes,” Lautz said.
The median income for repeat home buyers is up to $114,300 and their down payments reached 23%. That’s the highest recorded since 2003. According to NAR, 26% of all buyers paid cash for their home purchases.
As homes get increasingly expensive, NAR says 17% of home buyers are housing multiple generations. Thirty-six percent say they made the move to save money, 25% are entering the multi-generational fray to take care of aging parents, 21% have children over the age of 18 moving back in, and 20% have kids over 18 who never left.
However, the environment is getting more advantageous for prospective buyers. As mortgage rates have been falling, housing inventory hit its highest point in five years, according to Realtor.com.
There are a lot of reasons to sell, according to NAR. Twenty-three percent of sellers said they wanted to move closer to family, 12% sold because their home was too small, while 11% said their current residence was too big. Ten percent said their neighborhood conditions were deteriorating and wanted to move somewhere else.
