Other data shows average first-time buyer age hasn’t changed much in a decade
The mortgage industry was mortified at recent data released by the National Association of Realtors (NAR) about the growing age of first-time homebuyers.
The NAR data released in November showed that the average age of a first-time homebuyer had soared to 40 years old.
However, the Mortgage Bankers Association (MBA) recently examined data from the NAR survey, along with data from several other industry sources, to better understand the picture for first-time buyers.
It turns out the picture isn’t as bleak as it might have appeared in the NAR report. Other sources, such as Cotality, the FHFA National Mortgage Database (NMDB), Federal Reserve Bank of New York, and the Washington Post, show that the average age of first-time buyers hasn’t changed much in the last decade and is closer to 33 than 40.
Mike Fratantoni (pictured top) is the chief economist and senior vice president of research and business development at the MBA. He said one reason for the discrepancy is the size of the data pool.
“There are different data sources, and each have their strengths and weaknesses,” Fratantoni told Mortgage Professional America. “And I think the NAR data is a fairly small sample. It's a little over 6,000 total in the sample that responded, and it's about 1,200 first-homebuyers. So you always have to be concerned with such a small sample, is that representative of the market as a whole?
“The alternative data that we presented in that chart is primarily from mortgage data sources, each of which is looking at millions of transactions.”
Average age closer to 33
Another issue with these surveys is that different organizations have different definitions of who qualifies as a first-time homebuyer.
“There is kind of a curious, almost philosophical issue here, of why are there different definitions for what a first-time homebuyer is?” Fratantoni said. “There's a definition that the IRS uses. You might have households that split up, and perhaps they were a homeowner when they were together. And then each of the two individuals who go and buy, is that a first-time homebuyer or not?”
Fratantoni was a little surprised that the NAR data showed a higher first-time buyer age than the other providers, especially Cotality and the NY Fed, which define a first-time buyer as someone who had never had a mortgage lien.
“But the net of it is, as you would expect in the mortgage data, that the median age of a first-time homebuyer should be older than if you ask the more broad question of, ‘Are you a first-time homebuyer? Have you ever owned a home before?’” he said. “And so it's even more puzzling why the data from the realtor survey is so much higher.
“In conclusion, I think the weight of the evidence is that the median age of a first-time homebuyer just hasn't moved that much. And it's probably closer to 33 than 40.”
According to the report, the IRS defines a first-time buyer as someone who is not shown to have owned any other principal residence for the three years before the purchase date of the new principal residence. The NMDB requires first-time buyers not to have purchased a home in the prior seven years.
Affordability challenges remain
Although the age of first-time buyers might not have surged as noted in the NAR data, Fratantoni said it doesn’t downplay the affordability concerns first-time homebuyers are facing. However, there have been some trends in the right direction in 2025.
“We’re not minimizing the affordability challenges,” he said. “Mortgage rates have more than doubled from the low point, and home prices are up more than 50% from pre-pandemic. From early 2025, we have seen mortgage rates come down from their peaks of 8% to 6.25%. In some markets, you're seeing some home prices decline. But overall, it's a really challenging environment.”
Michael Brennan of Nationwide Mortgage Bankers urges originators to educate first-time buyers on FHA and VA streamline loans, emphasizing equity growth and refinance flexibility as rates are expected to fall in 2026.https://t.co/K2AsNkCAsn
— Mortgage Professional America Magazine (@MPAMagazineUS) November 27, 2025
He said one encouraging thing is that homebuyers are finding ways to navigate what has been a challenging market in 2025, whether it's via FHA loans or even adjustable-rate mortgage loans (ARMs). Homebuyers are also finding deals in certain parts of the country.
“More borrowers are using FHA loans, more borrowers are using ARMs, more borrowers are moving out of some of the highest cost markets in the country to lower cost metro areas,” Fratantoni said. “That's pretty clear in some of the domestic migration data. There are a number of different ways that borrowers can adjust. It's not all showing up as somebody waiting an additional six or seven years. If they want to buy, they're finding a way to buy.”
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