First-time buyers now make up just 21% of the market, down sharply from historical norms
The share of first-time homebuyers in the United States plummeted to a historic low of 21% over the past year, while the median age of first-time homebuyers entering the market soared to 40, according to the National Association of Realtors (NAR) 2025 Profile of Home Buyers and Sellers.
This marks a dramatic shift from the pre-2008 norm, when first-timers typically made up around 40% of buyers and were often in their late 20s.
Industry leaders pointed to a confluence of factors behind the trend, including limited affordable inventory and persistently high mortgage rates, which averaged 6.69% during the survey period.
“The historically low share of first-time buyers underscores the real-world consequences of a housing market starved for affordable inventory,” said Jessica Lautz, NAR deputy chief economist and vice president of research. “The share of first-time buyers in the market has contracted by 50% since 2007—right before the Great Recession. The implications for the housing market are staggering. Today’s first-time buyers are building less housing wealth and will likely have fewer moves over a lifetime as a result.”
Market divides deepen as repeat buyers dominate
The report highlighted a widening gap between repeat buyers—whose median age reached a record 62—and first-timers.
Repeat buyers typically brought larger down payments (median 23%) and were more likely to pay all cash (30%), while first-time buyers put down a median of 10%, matching the highest level since 1989.
Among first-timers, 59% used personal savings for their down payment, 26% tapped financial assets, and 22% relied on gifts or loans from family and friends.
“Unfolding in the housing market is a tale of two cities,” Lautz said. “We’re seeing buyers with significant housing equity making larger down payments and all-cash offers, while first-time buyers continue to struggle to enter the market.”
Changing demographics and the role of agents
The share of buyers with children under 18 fell to an all-time low of 24%, a shift attributed to both declining birth rates and the aging profile of repeat buyers.
Meanwhile, real estate agents remained central to the transaction process, with 88% of buyers and 91% of sellers working with an agent—both at or near record highs.
“Real estate agents remain indispensable in today’s complex housing market,” Lautz said. “Beyond guiding buyers and sellers through what is often the largest financial decision of their lives, agents provide critical expertise, negotiation skills, and emotional support during an increasingly challenging process.”
Affordability and policy challenges
The data underscore broader affordability challenges facing the US housing market.
“Delayed or denied homeownership until age 40 instead of 30 can mean losing roughly $150,000 in equity on a typical starter home,” said Shannon McGahn, NAR executive vice president and chief advocacy officer.
McGahn called for policy solutions to address inadequate housing supply, including unlocking existing inventory, enabling new construction, and modernizing zoning and permitting.
With first-time buyers sidelined by affordability barriers and older, equity-rich buyers dominating the market, the path to homeownership has never looked more daunting for new entrants. The industry’s next challenge will be finding ways to restore opportunity for the next generation of buyers.
Stay updated with the freshest mortgage news. Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.
