First-time homebuyers are fewer and older than ever before, according to new data from the National Association of Realtors.
NAR’s 2022 Profile of Home Buyers and Sellers found that the share of first-time homebuyers fell to its lowest point in the data’s history, while their median age rose to 36 years old, the highest point.
NAR has been compiling this data since 1981.
First-timers made up only 26% of all buyers, down from 34% last year. Their median age rose from 33 a year ago, while the typical repeat homebuyer’s age rose from 56 to 59, also a record high.
The median expected home tenure for a first-time buyer was 18 years, yet another record and up 8 years since 2021.
“It’s not surprising that the share of first-time buyers shrank to the lowest level ever recorded given the housing market’s combination of historically low inventory, persistently high home prices and rapidly escalating interest rates,” said Jessica Lautz, NAR vice president of demographics and behavioral insights.
“Those who have housing equity hold the cards and they’ve fared very well in the current real estate market. First-time buyers are older as a result of saving for down payments for longer periods of time or relying on a generational transfer of wealth to propel them into homeownership.”
Down payments are rising as well, putting more pressure on buyers without equity. The average down payment across the nation’s 50 largest metros was $62,611, up 35% from last year.
Black and Asian buyers were hit especially hard.
Both groups saw their share of buyers fall from 6% to 3% and 2%, respectively, a major decline over the course of one year.
White buyers accounted for 88% of the market, while Hispanic buyers saw a 1% boost to 8%, which NAR attributes to the group’s growing population in the U.S.
The data may be jarring, but as the market correction continues buyers will eventually be able to enter the market again.
“As prices settle, would-be buyers have more time to build savings, pay down debt, build their credit,” Greg McBride, the chief financial analyst for Bankrate.com, told the New York Times.
“The environment will improve for first-time buyers. It is just that now is not a great time.”
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