The First-Time Buyer is Disappearing

Written By Peri Erickson-Brown

The forces that are locking a generation out of the market

The typical first-time buyer is now 40 years old. In the 1980s they were in their late 20s. That's an entire decade of delay, and it didn't happen by accident.

 

There have been dramatic shifts around home buying in my lifetime.

In 1981, about 40% of all home purchases were made by first-time buyers. Today that number is 21% -- the lowest it's ever been since anyone started tracking it.

And the typical first-time buyer is now 40 years old. In the 1980s they were in their late 20s. That's an entire decade of delay baked into one generation.

 I want to dig into what's actually driving these trends, because I don't think the full picture gets talked about enough, and it matters for anyone trying to buy, sell, or just understand what's happening in the market right now.

The numbers

These figures come from NAR's 2025 Profile of Home Buyers and Sellers, which covers transactions between July 2024 and June 2025 and is the longest-running survey of its kind:

  • First-time buyers now make up just 21% of all home purchases -- the lowest share since NAR began collecting this data in 1981. Before the Great Recession, the historical norm hovered consistently around 40%.

  • The median age of first-time buyers has hit a record high of 40. Since 2010 that age has been climbing steadily from 30.

  • The age of repeat buyers has also hit an all-time high. In 1981, the median age of repeat buyers was 36. Today it's 62.
     

What’s actually driving these changes

1. Houses got expensive, and mortgages got expensive, at the same time.

This isn't just the "houses are expensive" argument. The combination of price increases and rate increases created a double hit that was historically unusual. Home prices rose about 45% between 2020 and 2025. Normally when prices climb that fast, rates are low and soften the blow. Instead, rates went from around 3% to nearly 7% during the same window. A first-time buyer with no existing equity got hit by both at once. Someone who already owned a home mostly just watched their net worth go up.

 

2. The people who could sell won't, and it's strangling supply.

This is probably the most underappreciated part of the whole story.

There aren't enough homes for sale, and a big reason is that existing homeowners are staying put. Why? Because they'd be giving up a 3% mortgage to take on a 7% one. The math doesn't work. A Federal Housing Finance Agency study found that for every percentage point that current rates exceed a homeowner's existing rate, the probability of that homeowner selling drops by 18.1%. Multiply that across tens of millions of households and you have an enormous inventory problem -- which keeps prices high, which locks first-timers out further. It's a vicious cycle.

That rate lock-in effect is estimated to have prevented over 1.7 million home sales between 2022 and 2024 alone.

There's also a demographic layer: Baby Boomers make up a large share of existing homeowners, and a significant portion have said they'd prefer to age in place. That preference, completely understandable on its own, adds to the supply problem.

 

3. Student debt ate the down payment years

Millennials graduated into the 2008 recession, spent their 20s paying off loans and high rents, and never built up savings at the pace previous generations did. It's not just a savings problem either -- carrying a lot of debt also affects mortgage eligibility directly, through debt-to-income ratios.

According to a 2025 Empower survey of borrowers, 53% of Millennials say they've delayed major financial decisions -- including buying a home -- because of student loans. Among younger Millennials who have bought homes, 43% are still carrying student debt with a median balance of $30,000, according to NAR's 2025 Generational Trends Report.

 

4. Buying a home increasingly means borrowing money from family -- and not everyone has that privilege .

Here's where it gets uncomfortable to look at directly. Repeat buyers, meaning people who already own a home and are bringing equity with them to their move-up home, now make up 79% of purchases. Nearly one in three paid all cash, and the rest brought a median down payment of 23%. They're simply not competing for homes in the same way. They don't have to.

First-time buyers, meanwhile, are putting down a median of 10% -- the highest for first time home buyers since 1989. That sounds like progress until you remember that home prices are up 45% since 2020, so 10% of a much bigger number.

Where is that down payment coming from? According to NAR, 59% of first-time buyers are using personal savings, 26% are pulling from retirement accounts or investment portfolios, and 22% are getting a gift or loan from family or friends. And inheritances as a down payment source have quietly hit an all-time high.

In my own experience working with buyers, family help shows up more often than surveys capture, and in more forms. Sometimes it's a formal gift letter for the mortgage file. Sometimes it's a parent quietly covering closing costs so their kid can stay competitive in a multiple-offer situation. Sometimes it's a loan that won't be repaid for years. The point is: for a lot of first-time buyers right now, getting into a home has become a family project in a way it simply didn't used to be. And for buyers without that family safety net, the gap is real.

What does the delay cost?

Buying at 40 instead of 30 isn't just a lifestyle difference, it's a financial one. NAR estimates that buying at 40 instead of 30 can mean losing roughly $150,000 in equity on a typical starter home. That's not just a rounding error, it's a retirement account. It also means fewer moves over a lifetime, less wealth to pass on, and retiring with a smaller nest egg.

 

It’s not your fault

If you've been feeling like you're doing everything right and still can't get there, this is why. It's not that your generation is bad with money or doesn't want it badly enough. The math genuinely changed -- fast, and in multiple directions at once.

The people who bought homes in their late 20s didn't do it because they were more disciplined. A lot of them just got there before prices doubled and rates tripled. Timing isn't a character trait.

You're not behind because you did something wrong. You're navigating a market that is objectively harder than the one previous generations bought into -- and the data backs that up completely.

What the path forward looks like is different for everyone, and figuring that out together is honestly my favorite part of this job. If you want to talk through where you are and what might be possible, I'd love to hear from you.

*A Note on the Numbers

Different data sources define "first-time buyer" differently, which is why you'll sometimes see conflicting figures. NAR's definition is strict: was this literally your first home purchase? Mortgage industry data tends to show a higher share of first-time buyers because it uses a broader definition that includes people who haven't owned a primary residence in the past three years, which counts divorced people re-entering the market and former owners who rented for a stretch. NAR's 21% is the most conservative read, and arguably the most telling.

 

Sources:

Let’s work together

If you've made it this far, you probably care about doing this right. That's exactly the kind of buyer or seller I love working with.

I brought 20 years of business experience to real estate for one reason — I believed people deserved better guidance on one of the biggest financial decisions of their lives. The last four years have been about delivering on that, one client and one transaction at a time. My approach is built around education and empowerment, so you always know where you stand and what comes next, whether you're buying your first home or selling one you've loved for years.

If you're ready to approach your next move with this kind of clarity and intention, and you want someone who treats your transaction with genuine care and rigor, I'd love to be part of that process. You deserve to feel confident and informed at every step, not just at the end. Reach out and let's start the conversation.

Peri Erickson-Brown
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