The typical first-time home buyer is now 40 years old, says a new report from the National Association of Realtors® (NAR).
That's the oldest since the report's inaugural issue in 1981, when average first-time buyers were in their late 20s.
The 2025 Profile of Home Buyers and Sellers, which was published Tuesday, went on to say that buyers under 35 accounted for only 12% of the market. It's tough out there for young buyers, thanks to massive headwinds in the economy.
The two biggest barriers to homeownership according to the NAR study were:
- High rent
- Student loans
As we reported yesterday, 15 million young adults age 18-24 still live with their parents according to a Harvard report. And the same culprits that are keeping young adults from homeownership are also responsible for few of them leaving the nest. But low incomes could be included. Two in three young adults earn less than 80% of their area's median income (AMI), while 40% had incomes below 50% of their local AMI.
A Tale of Two Age Groups
"The housing market remains divided between an all-time high of all-cash home buyers and an all-time low of first-time buyers," says the NAR report. This reflects the huge amount of wealth accumulated by the baby-boomer generation.
Will the next generation soon have access to those funds? To break into the housing market, that's what may need to happen. And many millennials and Gen Zers are counting on it.
"In the United States, baby boomers account for 51.8% of the country’s total wealth, worth $78.55 trillion," says the Michigan Journal of Economics (MJE). To put that in proportion, America's entire gross domestic product in 2024 was $29.2 trillion, according to the World Bank.
"An estimated $68-84 trillion is estimated to leave the hands of baby boomers and find ownership under their spouses and descendants in the subsequent generations," said the University of Michigan's journal earlier this year. " ... This colossal event is already underway, and many Americans are expecting to be impacted by it in the near future."
An MJE survey found that
- 55% of millennials expect to inherit wealth in the next five years
- 41% of Gen Z expect an inheritance in the same time frame
So, younger generations may eventually benefit from "the Great Wealth Transfer," as this phenomenon is known. However, it's not wholly satisfactory for younger people to spend many decades waiting for their parents to die to begin living their own lives fully.
And the children of parents with no assets will end up even further behind.
"It’s ... worth cautioning that the Great Wealth Transfer — as with wealth in general — will be highly concentrated among a minority of the population," says the CFA Institute, which comprises chartered financial analysts. "In the US, 25% of assets are held by 1% of the population, and almost 80% is held by 20%." So while the younger generation might benefit from cash gifts from family or an inheritance, those blessings surely won't be evenly distributed.
Cash Buyers vs. First-Time Buyers
As NAR said, cash buyers make up a much bigger proportion of home purchasers than was historically the case. Between mid-2024 and mid-2025, 26% of all the homes sold went to cash buyers. That was up from 7% in 2007, before the credit crunch and Great Recession.
Meanwhile, the proportion of first-time home buyers tumbled to an all-time low of 21%, far below the historical norm of 40%. And, as we've already mentioned, the median age of a first-time buyer has climbed to 40 years, says NAR, showing a more than decade delay in what has been a major milestone of adulthood.
Repeat Buyers — Finances and Tendency to Stay Put
Repeat buyers are people who have previously owned a home, typically moving straight from their existing home into a different one. And their profile has been changing, too.
To start with, they're making bigger down payments. The median for those in 2024-25 was 23% of the purchase price. And a whopping 30% paid cash, not bothering with a mortgage at all. They have benefited from the sharp home price appreciation seen this century, which has allowed them to build home equity quickly.
Given the recent trends in the housing market, you won't be surprised that homeowners are staying put in their existing homes for longer than ever: 11 years. Most have mortgage rates that are lower or much lower than the ones they'd get if they moved today.
Last year, federal regulator the Consumer Financial Protection Bureau published a paper on the mortgage rates homeowners were currently paying. It found:
- 21.9% of homeowners were paying a rate below 3%
- 35.4% had a rate between 3% and 3.99%
- 18.7% had a rate between 4% and 4.99%
- 9.6% had a rate between 5% and 5.99%
- 14.3% had a rate above 6%
So, roughly 86% couldn't move home without paying a higher mortgage rate. And more than half would face a truly scary hike in their mortgage payments.
Repeat Buyers — Demographics
Very few repeat buyers are young: just 6% are under 34 years. Indeed, the median age for all repeat buyers is 62 years, another record high.
NAR broke down the median ages of repeat buyers by relationship status:
- Married couple: 62 years
- Single female: 63 years
- Single male: 64 years
- Unmarried couple: 55 years
- Other: 63 years
None of this is a surprise. Repeat buyers are older and generally move home only for a reason. And those reasons are different from the ones cited in previous decades.
Today, repeat buyers often want to buy a place closer to family and friends. And they're not so interested in a short commute, which was mentioned by 31% of NAR respondents, down from 52% in 2014. Presumably, that's because many are retired.
Similarly, many of the single males and females are likely to be downsizing or relocating to be close to a support network after the sad death of a spouse, again owing to the high age of repeat buyers.
Conclusions
The main takeaways from this year's NAR Profile of Home Buyers and Sellers appear to be the aging of typical homeowners and the changes in buyers' requirements that this has brought.
While this pattern may alter as the Great Wealth Transfer puts more money into the pockets of Millennials and Gen-Zers, it's unlikely to return us to an era of most young people bringing up their families in their own homes.
The only way that's likely to happen is if politicians finally recognize the need to build millions of affordable homes.
