First-Time Home Buyers Hit Record Age of 40

The National Association of REALTORS released its highly anticipated 2025 Housing Profile report, revealing some stark contrasts in the market. The document shows a growing divide between the wealthy and middle class and helps to shed light on what’s driving this trend.

This annual survey is seen as a guiding metric for real estate professionals, buyers and sellers, and lawmakers seeking to gain valuable insight into the current state of the housing market. As such, this year’s data is regarded as somewhat troubling. Here’s what you need to know.

Buying Your First Home

Traditionally, owning your home has been seen as a major accomplishment, bringing you one step closer to financial freedom and retirement. For most people, buying a home will be the largest purchase they make in their lives. As such, the majority of people will utilize their home to build wealth and stability.

Sadly, this important first step towards securing a brighter financial future has been deferred by the majority of people by another 10 years, until the age of 40. There are many factors for this delay, ranging from economic scenarios, all the way to a change in the way home ownership is viewed in general. Thankfully, the Profile of Home Buyers and Sellers report sheds some light on what’s driving this market and where it’s heading.

Quelle. The Mortgage Reports

2025 Profile of Home Buyers and Sellers

The National Association of REALTORS publishes the Profile of Home Buyers and Sellers report annually. Notably, it’s the longest-running report showcasing housing demographics and attitudes, with the first edition issued in 1981.

The collected data comes directly from a 120-question survey sent out to 173,250 recent home buyers. This year had 6,103 respondents and represents the housing market sentiments from July 2024 to June 2025. Notably, the data doesn’t include any investment or vacation property statistics.

Key Findings from the 2025 NAR Report

This year’s report revealed some very interesting trends. For one, it shows that all-cash home buys are at an all-time high, as well as revealing all-time lows for first-time home buyers. It also revealed that the average mortgage rate was 6.69% at that time. Here are some other key details worth mentioning:
Wischen zum Blättern →

Historic Lows for First-Time Buyers

The data shows that first-time home ownership has dipped to levels not seen since before the 2008 housing crash. Specifically, NAR notes the share of first-time buyers has contracted by roughly 50% since 2007—a dramatic shift that predates and then worsened after the Great Recession.. This decrease was brought on by several factors, including higher costs of living, increased property values, and a more competitive market.

First-time home buyers will need to take time into consideration. The report explains that delayed home ownership results in around $150k in equity loss on average. These losses mean that there are fewer opportunities for these individuals, especially when coupled with inflation. As the current homeowners age, it directly affects this generation’s ability to build wealth.

The New First-Time Buyer Profile

The report also shows that the median age for first-time home ownership has now reached an all-time high of 40 years old. New buyers are making a smaller down payment as well, with the average being 10%. As such, most will need private mortgage insurance (PMI) in addition to their loan.

PMI is required when a home buyer has less than 20% down on a property. This monthly payment can increase your mortgage and make it more expensive to own your home. However, it should be noted that because home prices are higher, this 10% payment doesn’t mean that first-time buyers aren’t paying more than their predecessors in terms of amounts.

According to this data, first-time homebuyers secure their down payment from a few key locations. The majority of these funds came from their personal savings, with 59% responding that they saved up the cash over time.

An additional 26% of the funding comes from stocks, 401ks, and cryptocurrencies. Lastly, 22% of those surveyed received a loan or gift from family to make the down payment on their first home.

Why Did First-Time Home Ownership Levels Drop?

The report shows some key reasons why first-time home owners have become older than ever. It cites past economic situations in which a lack of affordable housing resulted in slowed first-time ownership opportunities.

Homeowners are Older

Since the majority of today’s first-time buyers have saved up their 10% down payment personally, it makes sense that the age of first-time buyers is older. The cost of living is higher than ever, alongside inflation, and a subscription-based economy – it’s harder than ever to save a down payment.

A Clear Divide

On the flipside of the equation, you have older homeowners who have lots of equity in their property. Homeowners are using this equity to make down payments on other properties, including all-cash offers. Their home value continues to rise, which has played in their favor.

Of course, the rising home prices aren’t an accident. It represents the aging demographics in the US. As people live longer now than ever, it means that they require their wealth for more time. Consequently, they aren’t handing it down until much later in life.

As such, there hasn’t been that generational wealth transfer that helped younger generations leap to financial stability in the past.  Instead, the older generations’ focus has remained on ensuring that their current assets retain and grow in value, helping to ensure a safe retirement.

Repeat Buyers

Interestingly, the median age of repeat home buyers is 62 years old. This older generation of investors has more assets and equity, which can be seen by their financial maneuvers. The report showed that 23% of repeat home buyers made 20% down payments. Even more revealing is that 30% of repeat home buyers purchased their property outright.

Who’s Buying Homes in 2025?

The median home buyer in the US now sits at 59 years of age. Of those surveyed, about a quarter have younger family members living with them. When questioned about their home being a generational asset, the data revealed that only 14% purchased their home for that purpose.

Notably, multigenerational home buyers made their purchases for several key reasons, including 41% who use the home to house their aging parents. The same report showed that 27% now live with their +18-year-old children, who moved back in due to financial struggles or convenience.

Surge in the Use of Agents

Real estate professionals found some great news in the report, as it showed a rise in the use of agents by both buyers and sellers. The survey data states that 88% of buyers decided to utilize an agent, while 91% of sellers made the same choice, representing an all-time high for sellers. Additionally, the survey found that 91% of home buyers would recommend using an agent to others and would use an agent for their next purchase.

What the Data Means for the Market

There are some significant trends that this data shows, which could help to guide market professionals forward. For one, the report highlights the need for more housing inventory across both the used and new markets. Additionally, it reveals that the inventory currently on the market or entering it is likely overpriced, reducing the ability of first-time buyers to participate and build wealth.

Sellers

Homeowners have made some stark changes to their lifestyles. For example, the data shows that the average homeowner lives in their house for 11 years before deciding to sell it. For reference, the average was 6-7 years in 2000. Their main reasons for selling a home are also split. Interestingly, 50% sold to buy a newer property, and 34% responded that they needed a larger home. Notably, the majority of people didn’t move far, with the average move only being 30 miles.

The Generational Housing Gap Widens

As baby boomers live longer, they need to protect their retirement funds. As such, they have put forth their full voting power to ensure that the value of their main asset remains high. Sadly, this desire is the direct opposite of what they required when they were in their 20s-30s, in which affordable home ownership was the focus.

How the Government Could Help

There are several ways in which the government could step in and provide some help to potential first-time buyers. In the past, smart government policy has helped first-time home owners qualify for special loans with discounted rates or down payments.

The HA and VA programs are prime examples of groups that can help people get into their first home. Additionally, lawmakers could improve their response times on critical tasks like zone restructuring, approving permits, and approving first-time home ownership tax benefits.

Add More Inventory

At the end of the day, the main issue is a lack of affordable home options. The government could help to relieve this scenario in several ways. For one, they could relax some of the building restrictions, enabling more new construction.

The government could also drive home sales by enticing sellers with incentives. However, it’s hard to beat making record profits on your home sales as the main motivator. Despite this situation, the short-term rental economy has created a unique scenario in which homes are being sold for their income-generating capabilities rather than their live-in value.

Rebuild

Another short-term strategy that could help to introduce an influx of properties to the market is to rebuild rundown areas. Many see investing in dilapidated neighborhoods as gentrification. However, for real estate owners, it opens the door for more properties to hit the market in short succession.

Keenly, these properties are usually located close to or directly outside of premier locations, making them eligible for substantial price increases as they get renovated. Of course, this strategy only works at first. Once the neighborhood becomes nicer, the prices of all houses increase, furthering the gap that first-time home owners will need to fill.

Modernize Construction

Making new homes affordable in the current economy is a tricky task. However, there are several methods, like using different materials or building strategies, that can help to reduce the overall cost of new construction. For example, new technologies like 3D-Druck could revolutionize the housing market moving forward.

National Association of REALTORS (NAR)

The National Association of REALTORS entered the market in 1908 as the  National Association of Real Estate Exchanges. Its goal is to organize the entire market to help ensure that a combined effort can be put forth when dealing with regulations and other industry-wide matters.

This +100-year-old organization has helped to bring transparency and stability to the real estate sector. Today, it’s one of the largest trade associations in the US. As such, millions of professionals rely on this organization to ensure that the market continues to expand and protect its participants.

New Opportunities and Challenges for Buyers and Sellers

When you delve into the data, you find a mixed bag in terms of pros and cons for first-time home buyers. On the one hand, it’s harder and costs more to get into a home. On the other hand, you have a large population of the country nearing their final life stages. As such, the market will see an influx of inherited properties, alongside first-time buyers, as time progresses.

However, in the short term, first-time buyers are feeling the crunch under the weight of repeat buyers and those seeking to make a major profit on their real estate investments. Time will tell if the economy can sustain the current housing market or if first-time buyers can figure out a way to gain more access to properties in the future.

Learn about other Interesting Real Estate News Hier.