Sixty-three percent of first-time home buyers want to buy their forever home, according to a new survey published this week by Nationwide Insurance. That leaves only 37% who are aiming to purchase a starter home. You may find this strange and unrealistic on a number of grounds.
Unrealistic Expectations of Staying in One Place
To start with, the average American moves 11.7 times during their lifetime, according to the U.S. Census Bureau. "At age 18, a person can expect to move another 9.1 times in their remaining lifetime, but by age 45, the expected number of moves is only 2.7," says the bureau.
Meanwhile, "The median first-time buyer age increased to 38 years old this year from 35 last year," according to the National Association of Realtors®' Profile of Home Buyers and Sellers in 2024. So, it's statistically unlikely that a first-time buyer will actually stay in their home for their entire lives.
Why “Forever” Homes Often Turn Out To Be Temporary
It's easy to imagine reasons why homeowners find they need to move. They might:
- Separate or divorce.
- Get a better job or promotion in a different area, city or state.
- Want a bigger or better home because they earn more money or have a windfall.
- Tire of their commute.
- Have a smaller or larger family than they planned.
- Need access to a better school district.
- Provide assistance to their elderly parents.
- Want to escape a deteriorating neighborhood.
- Choose to move closer to family or friends.
- Become empty nesters and decide to downsize.
That list is potentially endless. But many (maybe most) homeowners eventually find themselves facing one of those needs or wants.
Sure, some people buy a home and live in it for the rest of their lives. But it's not all that common.
Starter Homes Can Be Better Than Forever Homes
When NBC News looked at first-time buyers in April this year, it talked to Hahmie Lee, 37; her husband, David Matozzo, 31; and their 7-year-old daughter, Luna. "I definitely took my time, and now I’m just regretting waiting," said Lee.
She had just viewed a home listed in Hatfield, Pennsylvania, at close to $500,000, out of her price range. It had sold in 2019 for $209,000. Back then, she and her husband might have been able to afford it.
Had she bought it then, she'd by now have pocketed $291,000 in equity ($500,000 current sale price - $209,000 original sale price = $291,000 profit). And, with that down payment, she could now, perhaps, afford an even bigger and better home.
That's how the housing market used to work. Young people would buy inexpensive starter homes, and after some years, use their equity and higher earnings to trade up.
True, each move would cost them in closing costs, moving expenses and real estate agent commissions. But they often ended up with great homes that they could comfortably afford. And few buyers expected their first home to be their forever home.
Of course, it was much easier back then for young boomers to get on the housing ladder than it is for today's 20-somethings. And nobody should blame 2025's young adults or accuse them of fecklessness.
But those who can access the housing market may find it easier to do so by buying a modest starter home to begin with and then gradually trading up to their forever home.
