The share of home purchases made by first-time buyers fell to the lowest level on record this year as many younger Americans were priced out of the market by home price inflation, high interest rates, and increased costs of living.
First time buyers made up just 24 percent of purchases in 2024, according to the National Association of Realtors. That’s the lowest market share since the NAR began collecting data in 1981.
It marks a steep decline from last year, when first time buyers made up 31 percent of purchases. During Donald Trump’s presidency, the average was 33 percent.
The median first-time buyer age jumped to 38 years old this year from 35 last year, highlighting just how hard it is for young families to purchase homes. The median age during Trump’s presidency was 33 years old, close to the historical average.
“The U.S. housing market is split into two groups: first-time buyers struggling to enter the market and current homeowners buying with cash,” said Jessica Lautz, NAR deputy chief economist and vice president of research. “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. Meanwhile, current homeowners can more easily make housing trades using built-up housing equity for cash purchases or large down payments on dream homes.”
The home affordability crisis is one of the biggest sources of unhappiness with the economy among young people, according to surveys. The median price of a home purchased in the U.S. is up 24 percent since Joe Biden and Kamala Harris took office.
The average 30-year fixed mortgage rate was 3.6 percent prior to the pandemic and fell dramatically when the Federal Reserve cut interest rates to support the economy. Now it is 6.72 percent. The combination of higher rates and higher prices puts homeownership out of reach for many Americans.