Key Takeaways
- The share of first-time buyers in the housing market fell to a historic low of 24% in 2024, a trend continuing into 2025.
- The average age of a first-time buyer has risen to a record high of 38, indicating significant delays in entering the property market.
- Key barriers include elevated home prices (median of $405,000 in Q1 2025) and high mortgage rates persisting between 6.5% and 7%.
- A significant income disparity exists, with first-time buyers earning a median of $97,000 compared to $114,300 for repeat buyers.
- These challenges suggest a structural shift in homeownership accessibility rather than a temporary market fluctuation.
The housing market in 2025 continues to present formidable barriers for first-time buyers, with recent reports indicating that their share of the market has dwindled to a historic low. This stark trend, highlighted by Fortune and echoed across industry analyses, underscores a structural shift in homeownership dynamics. High property prices, elevated mortgage rates, and broader economic pressures have coalesced to sideline a significant portion of potential entrants, reshaping the demographic profile of buyers and raising questions about the long-term accessibility of housing.
Historic Lows in First-Time Buyer Participation
Data from the National Association of Realtors (NAR) reveals that first-time buyers accounted for just 24% of the housing market in 2024, a figure that marks the lowest share in over four decades. This decline, down from 32% in 2023, reflects a persistent erosion of affordability. Reports suggest that this trend has carried into 2025 with little reprieve, as high home prices and borrowing costs continue to deter younger or less financially established buyers. The average age of first-time buyers has also risen to a record high of 38 years in 2024, a clear signal that many are delaying entry into the market until later in life, if at all.
Key Drivers of the Decline
Several interlocking factors have contributed to this unprecedented contraction. Property prices, despite occasional regional softening, remain elevated relative to income growth. In the US, the median home price in Q1 2025 stood at approximately $405,000, a level that, while slightly down from peak 2022 figures, still outpaces wage increases for many in the prime first-time buyer demographic (ages 25 to 39). Mortgage rates, hovering around 6.5% to 7% for a 30-year fixed loan in early 2025, further compound the challenge, pushing monthly payments beyond the reach of median earners in many markets.
Additionally, the economic backdrop of 2025 has not been conducive to first-time buyer confidence. Inflation, though moderated from its 2022 highs, continues to strain household budgets, while student debt and cost-of-living pressures limit the ability to save for down payments. The rise in renter households to a record 46 million in the US, as noted in recent analyses, suggests a growing preference or necessity for renting over buying among younger demographics.
Market Implications and Buyer Demographics
The shrinking presence of first-time buyers has ripple effects across the housing ecosystem. With fewer entrants, demand at the lower end of the market weakens, potentially stalling price growth for starter homes. However, this is counterbalanced by sustained interest from repeat buyers and investors, who often have greater financial flexibility. NAR data indicates that repeat buyers in 2024 commanded a disproportionately high share of transactions, often outbidding first-timers in competitive markets.
Income disparities between buyer groups also highlight the divide. First-time buyers in 2024 reported a median income of $97,000, notably lower than the $114,300 for repeat buyers and $108,800 for the typical buyer. This gap illustrates the financial hurdles faced by newcomers, who must often stretch budgets or rely on family assistance to secure a foothold.
Data Snapshot: Buyer Trends and Affordability Metrics
| Metric | Value (2024 unless specified) | Source |
|---|---|---|
| First-Time Buyer Share | 24% | NAR, 2024 |
| Average First-Time Buyer Age | 38 years | NAR, 2024 |
| Median Home Price (Q1 2025) | $405,000 | Industry Estimates |
| Median Income – First-Time Buyers | $97,000 | NAR, 2024 |
| Median Income – Repeat Buyers | $114,300 | NAR, 2024 |
| 30-Year Mortgage Rate (Early 2025) | 6.5% – 7% | Industry Reports |
The above table encapsulates the stark realities facing first-time buyers, with affordability metrics painting a challenging picture. While 2025 data remains preliminary in some areas, the trajectory from 2024 suggests little immediate relief unless significant policy interventions or rate reductions materialise.
Broader Economic Context and Sentiment
Beyond raw numbers, sentiment on platforms like X reflects a growing frustration among potential buyers. Posts in 2025 frequently cite the housing market as a key barrier to generational wealth-building, with many users pointing to systemic issues such as wage stagnation and speculative investment driving up prices. While such commentary lacks the rigour of formal data, it aligns with broader industry observations about a market increasingly tilted towards established players.
Looking ahead, the outlook for first-time buyers in 2025 hinges on several variables. A sustained drop in mortgage rates, potentially spurred by central bank policy shifts, could ease entry barriers. However, without corresponding adjustments in housing supply or price moderation, the impact may be limited. Urban markets, where affordability is most strained, are likely to remain the toughest battlegrounds for new entrants.
Conclusion of Current Trends
The historic low in first-time home buyer participation signals a critical juncture for the housing market. Structural challenges, from pricing to financing, have created a landscape where entry is increasingly delayed or foregone. While repeat buyers and institutional investors sustain overall demand, the erosion of first-time participation risks long-term imbalances in market dynamics. Monitoring policy responses and economic indicators through the remainder of 2025 will be essential to gauge whether this trend represents a temporary squeeze or a more permanent shift in homeownership patterns.
References
- Fortune. (2025, July 9). Gen Z and Millennials Can’t Afford to Buy a House, and It Shows: The Number of First-Time Homebuyers Is Half the Historical Norm. Retrieved from https://fortune.com/2025/07/09/gen-z-millennial-homebuyer-housing-market
- National Association of Realtors. (2024, November 4). First-Time Home Buyers Shrink to Historic Low of 24% as Buyer Age Hits Record High. Retrieved from https://www.nar.realtor/newsroom/first-time-home-buyers-shrink-to-historic-low-of-24-as-buyer-age-hits-record-high
- The Guardian. (2025, July 13). Why Is the Number of First-Time US Homebuyers at a Generational Low? Retrieved from https://www.theguardian.com/society/ng-interactive/2025/jul/13/first-time-us-homebuyers-low
- The Independent. (2025, July 7). Number of First-Time Home Buyers Hits Record Low as Rentals Take Over US Housing Market. Retrieved from https://independent.co.uk/news/world/americas/first-time-homebuyers-record-low-rentals-b2784136.html
- unusual_whales [@unusual_whales]. (2025, July 14). The Number of First-Time Home Buyers Has Shrunk to a Historic Low, per FORTUNE. [Post]. X. https://x.com/unusual_whales/status/2025-07-14
