A recent study by the National Association of Realtors (NAR) reveals that the average age of homebuyers in the United States has reached a record high of 49 years, marking a significant increase from the average age of 31 in 1981.
The study also indicates a rise in the median age of first-time homebuyers, now standing at 35, up from 31 in 2013 and 29 in 1981.
According to the NAR, these shifts can be attributed to tighter credit conditions and a shortage of available housing, which has contributed to an escalation in home prices. The average home sales price has soared to $410,200, the second-highest figure in history.
While the proportion of first-time buyers in the housing market has increased to 32% from last year’s historic low of 26%, it remains considerably lower than the 38% annual average observed since 1981.
Jessica Lautz, NAR Deputy Chief Economist and Vice President of Research, commented on the trend: “First-time buyers have been more active in the market this year, facing less competition and fewer instances of multiple offers. Although the percentage of these buyers is still relatively low, it has seen an increase from last year.” Lautz also noted that current first-time buyers typically have higher household incomes and are more likely to leverage financial assets for home purchases.
The NAR highlighted that the combination of rising home prices and mortgage rates has significantly eroded housing affordability. Additionally, the study found that the household income of successful homebuyers has increased by nearly $20,000, crossing the six-figure threshold for the second time in record.
Mark Hamrick, a senior economic analyst at BankRate, spoke to Axios about the challenges younger homebuyers face. He pointed out that the increasing costs of higher education, job instability, and the pressure of saving for retirement have made it increasingly challenging for younger individuals to establish a solid financial foundation, impacting their ability to enter the housing market.
