The annual report from the National Association of Realtors (NAR) is shedding new light on some real estate trends. Perhaps the most surprising is what the report found about the age of first time home buyers.
Take a guess: What do you think is the average age of first-time homebuyers in the United States?
Not too long ago, buying a house was a milestone typically reached after securing the first job or perhaps tying the knot. These homes, often referred to as “Starter Homes,” were affordable, serving as an entry point into the housing market, providing firsthand experience in managing one’s own space. A few years later, homeowners would list their properties, upgrading to something larger and more expensive.
In the 1980s and 1990s, the average age of first-time buyers fluctuated between 26 and 28 years old, with the typical age for moving into a second home averaging between 31 and 33 years old.
Now, returning to our question: What do you think the average age of first-time buyers is today?
According to the report the average age of first-time buyers in 2022 was 35 years old. Remarkably, the average age of those progressing to their second home reached unprecedented levels at 59 years old.
This increase can be attributed to various factors. Our society has become more transient, with individuals constantly on the move—changing jobs, relocating between towns. The desire for flexibility and the fear of being tied down by a 30-year mortgage may deter some younger buyers from making long-term commitments.
Additionally, economic factors come into play. Housing prices are outpacing salary growth. The NAR report reveals that in 2022, the average household income for first-time buyers was $107,000 per year—an increase of 22% from the previous year. As the landscape of homeownership evolves, these trends shed light on the shifting dynamics of the real estate market.
Here are some other findings from the report:
- First-time buyers made up 32%. In the 80’s and 90’s first time buyers were typicall responsible for 38 to 40% of annual sales.
- 41% of recent buyers, the first step that they took in the home buying process was to look online at properties for sale, while 20% of buyers first contacted a real estateagent.
- Buyers typically searched for 10 weeks and looked at a median of 7 homes
- Average down payment was $30,454- which is an increase of 118% since 2020
- 59% of recent buyers were married couples, 19% were single females, 10% were single males, and 9% were unmarried couples. This is the lowest share of married couples since 2010.
- 14% of home buyers purchased a multigenerational home, to take care of aging parents,
- The median distance between the home that recent buyers purchased and the home they moved from was 20 miles. This is a decline from 50 miles last year
You can read the NAR report here.