In 2022, the average age of first-time homebuyers was 36, according to the National Association of Realtors (NAR). This is up from 33 in 2021.
Why it matters: The median homebuyer age has jumped 10 years — to 49 — in two decades, new data shows, as the housing affordability crisis deepens. Repeat buyers were a median age of 58 in 2023, while first-time buyers were 35, per National Association of Realtors annual data released this week.
But despite current conditions, many are still determined. Nearly 72% of Gen Zers between ages 18 and 26 still plan to buy a home in the next one to six years, according to a survey conducted by Rocket Mortgage.
It all comes down to a healthy labor market, Daryl Fairweather, the chief economist at Redfin, told Insider. "It has a lot to do with the timing of when Gen Z entered the labor market versus when millennials did," Fairweather said.
Affordability is a challenge for Gen Z homebuyers, but it's also a challenge for millennials and buyers of other generations. The Gen Zers now in early adulthood have had less time to accumulate savings than previous generations, which could make it more difficult to become a homeowner in the short term.
On Friday, the National Association of Realtors reported that 2023 saw the smallest number of home sales in nearly 30 years. Last year was rough for homebuyers and realtors as a trifecta of forces made it harder than ever to buy a place to live. Or, at least the hardest in nearly three decades.
WASHINGTON (March 28, 2023) – The share of baby boomers has surpassed millennials and now makes up the largest generation of home buyers, according to the latest study from the National Association of Realtors®.
While baby boomers—defined as Americans between the ages of 58 and 76 in 2022—comprise just over 20% of the U.S. population, they account for nearly 38% of homeowners nationwide.
Further, by the age of 27, 90 percent of young adults have moved out of their parents' homes at least once. Other research puts the average age to move out of the parental home at between the ages of 24 and 27. So the numbers are all over the map. One thing's for sure: don't rush the decision.
Buying a house in your 20s could make sense if you don't see yourself moving in the near future. Young buyers should consider their needs versus what they can afford. A good credit score and consistent income are two of the biggest factors in mortgage approval decisions.
However, if you're looking for a bargain, you're likely to find the lowest prices in the winter. There are fewer buyers over the winter months, so many sellers take their homes off the market for the season with the plan to start fresh in the spring.
The average mortgage payment is $2,883 on 30-year fixed mortgage, and $3,759 on a 15-year fixed mortgage. But the median payment is likely a more accurate measure for many: $1,775 in 2022, according to the US Census Bureau.
Millennials have had a more difficult path to home ownership
Growing that wealth has been made more difficult due to the drop in housing supply over the last 15 years, which has pushed prices up and made it that much harder to get into the market.
There's no right or wrong age to buy a house — just the right or wrong time. Be sure to consider your financial situation, your employment, the local housing market, and your future goals and plans. Consult a real estate agent or loan officer for professional advice if you're unsure.
The study found that 21.9% – the largest percentage of Gen Zers – plan to put down 8% – 11% of the purchase price of a home followed by down payment amounts of 4% – 7% and 12% – 15%. Only 10.1% of Gen Zers plan to put down 20% of their home price.
Boomers—born between 1946 and 1964—are currently the wealthiest generation on the planet.
Breakdown of Wealth by Generation
The Visual Capitalist used the Federal Reserve's data from the final quarter of 2022 to provide a general breakdown of generational wealth. Here's what they found: Baby boomers: $78.1 trillion (50%) Generation X: $46 trillion (29.5%)
The volume of existing home sales was down more than 6 percent from December 2022 to December 2023, according to the National Association of Realtors. And, according to the Fannie Mae Home Purchase Sentiment Index released in January 2024, an overwhelming 83 percent of consumers believe it's a bad time to buy a house.
Houses weren't always this expensive. In 1940, the median home value in the U.S. was just $2,938. In 1980, it was $47,200, and by 2000, it had risen to $119,600. Even adjusted for inflation, the median home price in 1940 would only have been $30,600 in 2000 dollars, according to data from the U.S. Census.
As cities expanded, high land prices and crowds persuaded people and commerce alike to search for cheaper and more accommodating real estate alternatives. Following World War II, the inner cities were busting at the seams. After many years urban growth spilled over into the suburbs.
According to recent data, the average length of time people spend in their first home before purchasing their second is about 7-10 years. This can vary based on a variety of factors, including job stability, family size, and personal preferences.
Now, however, millennials have achieved something remarkable: they have become a majority-homeowner group. In 2022, the share of millennials owning homes increased to 51.5%, according to a RentCafe analysis of census data.
Rent is so expensive for Gen Zers that almost one-third are living with their parents, new report finds. 31% of Gen Zers live with a parent or family member because they can't afford to rent or buy their own place.