BMO survey showed first-time buyers skipped starter homes and waited for one big move
Americans increasingly treat the first home purchase as a once‑in‑a‑lifetime bet, rather than a stepping stone, according to new findings from BMO’s Real Financial Progress Index.
The survey, conducted by Ipsos in the US from February 17, 2026 to March 18, 2026 among 2,500 adults, suggested many buyers chose to delay entering the market.
Instead of starting small, respondents aimed straight for a “forever home” and stayed on the sidelines until both prices and rates aligned with their long‑term plans.
The BMO research found Americans on average expect to be 40 when they buy their first home, in line with National Association of Realtors data showing the typical first‑time buyer age at 40 – up from the late‑20s in the early 1990s.
Baby boomers again held the upper hand in the US housing market, making up 42% of buyers while first-time purchasers slipped to a record-low 21%, according to NAR’s 2026 Home Buyers and Sellers Generational Trends report.
Nearly three in four respondents said owning a home remains a major life goal, yet only 14% of non‑owners plan to buy within a year, even after recent rate cuts. A slim majority said they are waiting for borrowing costs to fall further.
“The American dream of owning a home is still alive and well, even if the market is presenting challenges that require new financial strategies for many to achieve this dream,” said Paul Dilda, head of US consumer strategy at BMO.
“When prices and rates are high, your best offense is a good defense: a smart budget and a financial partner who can review your full financial picture to help you secure the best terms within your means so you can get those keys in hand.”
Forever homes and multipurpose spaces
Sixty‑five percent of buyers expect their first purchase to be their forever home, a view shared by 67% of house‑hunting millennials, while 58% of non‑owners said buying a starter home and upgrading later simply “makes no sense these days.”
Among Gen Z and millennial homeowners, 52% believe their first home would also be their last, and many reported feeling social media pressure to buy.
“With more first-time homebuyers entering the market later in life, they are no longer looking for a starter home, but rather a house that matches their life stage and family needs,” Dilda said.
Younger buyers also prioritize flexible floorplans – from in‑law suites for the “sandwich generation” to extra space for rental income – as caregiving demands and affordability pressures mount.
Care, climate and AI on the path to purchase
Even high earners struggle. Nearly half of renters under 40 earning at least $100,000 said they are less confident about ever owning than five years earlier.
Three quarters of Americans with caregiving responsibilities reported anxiety about housing costs, and many said retirement saving still takes precedence over a down payment.
Rising insurance costs and climate risk also weighed on decisions about where and whether to buy.
“It’s still really, really hard for a lot of Americans to afford a house,” Matt Schulz, chief consumer finance analyst at LendingTree told Mortgage Professional America.
“Yeah, the typical mortgage payment went down a little bit. And yeah, there’s a significant variation depending on where you live in the country. But by and large, affordability is still a really big issue. That’s not exactly breaking news.
Faced with these headwinds, younger buyers experiment with work‑arounds already familiar to mortgage professionals. Many are willing to trade shorter commutes for cheaper “Zoom town” markets, co‑buy with friends or family, or move in with relatives to share housing costs.
Digital tools add another layer. According to BMO, 72% of homebuyers plann to use AI at some point on the road to ownership, chiefly to compare mortgage options, test affordability and decode legal requirements.
Mortgage leaders previously told MPA they view AI as a way to automate routine work while keeping human advice at the center of complex decisions.
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