The average home buyer is 56 years old as first-time buyers fall to historic lows

[Simone Del Rosario]

The American dream of owning a home is increasingly for those in their later phases of life. And forget buying your starter home. This year, first-time home buyers make up the smallest slice of the market since the National Association of Realtors started keeping track in 1981.

First-time buyers between July 2023 and June 2024 dropped to 24% of the market from 32% a year ago.

NAR Deputy chief economist Jessica Lautz said, “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.”

The average age of first-time buyers rose to 38 from 35 last year. Meanwhile, the average age of repeat buyers hit 61 from 58 years old. Put all buyers in the same pile, the average home-buying age this past year is 56 years old, up from 49 years old just one year ago.

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, they’re putting down an average of 9%. Yes, that’s shy of the golden 20% goal, but it’s the highest down payment for first-time buyers since 1997.

Sixty-nine percent of first-timers relied on savings for down payments. 25% got loans from friends and family, 21% cashed out financial assets and an all-time high of 7% used inheritance money to close the deal.

Now repeat buyers have more to play with. Lautz says “Current homeowners can more easily make housing trades using built-up housing equity for cash purchases or large down payments on dream homes.”

Repeat buyers’ median income is up to $114,300. And down payments reached 23%, the highest since 2003.

Who puts down more than 20%? Well, a record 26% of all buyers paid cash for their castle.

Those castles are increasingly including multiple generations. NAR says 17% of home buyers are falling under this category, another record.

And there are a lot of reasons for going this route. 36% 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, while 20% have kids over 18 who never left.

If there’s any silver lining to one of the most difficult home-buying years to date, as mortgage rates start to come down, inventory hit its highest point in five years, according to Realtor.com.

So why are sellers, selling?

23% say they want to move closer to family and friends, 12% say their home was too small, 11% say their house was too big, and 10% said the neighborhood was going downhill.