By Julie Zauzmer Weil | The Washington Post (abridged)
Members of the cohort born from 1981 to 1996 are now 29 to 44 years old — meaning they’ve all reached the age where their parents and grandparents were probably homeowners. But because the typical millennial has met with economic upheaval for much of their working life, they’ve been on a slower timeline.
The National Association of Realtors (NAR) made headlines this month when its annual survey of home buyers revealed an eye-popping statistic: The average first-time home buyer is now 40 years old.
For years, the real estate agents’ annual survey of home buyers showed a very gradual uptick in first-time buyers’ ages, from a median of 28 in 1991 to 33 in 2019. But it’s accelerated since the pandemic, the survey showed, jumping to 36 in 2022, 38 in 2024 and now 40.
But those findings don’t match up with other data on first-time home buyers.
Connor O’Brien, an economic policy researcher, analyzed data from the Census Bureau’s American Housing Survey, which asks a huge representative sample of Americans about their housing. By his findings, the median age of a first-time home buyer has held at 33 for nearly a decade, from 2014 to 2023, the most recent year data is available.
When more data comes out, O’Brien still isn’t expecting a huge uptick in buyers’ ages. Housing costs are higher now than before the pandemic, but not much higher than 2023. “The volume of sales hasn’t changed that much. Interest rates on new mortgages haven’t changed that much. Given that all these big market indicators have basically remained [flat], it would be strange to think the median age of buyers suddenly shot up,” he said.
So what’s going on? Are millennials delaying homeownership or are first-time home buyers just as young as they ever were?
The answer is yes on both counts: For buyers, the median age at which they purchase their first home is about the same, based on the American Housing Survey data that looks at a huge swath of households. But millennials are a big generation. There are more Americans born in 1990 and 1991 than any other years — people who are now 34 and 35 years old. And because fewer homes are being sold, fewer of those millennials are becoming home buyers at all.
It’s probably not true that the average first-time home buyer is that much older than before, despite the NAR’s questionnaire results. But it is true that millennials have found homeownership harder to attain than earlier generations.
Jessica Lautz, an NAR economist, stood by her organization’s survey. She said her group sends an annual survey to people who bought houses in the past year. This year, the group mailed the questionnaire to more than 173,000 buyers, and 6,103 responded.
She speculated that perhaps young adults, who can’t afford homes in the cities they want to live in, are instead buying rental properties in cheaper markets as investments — which would show up as young purchasers in some other studies of first-time home buyers, but not in her survey, which only looks at buyers of primary residences.
Federal Reserve economists largely attributed the declining number of first-time home buyers to shrinking transactions overall. In 2003, more than 7 million people bought homes with mortgages. In 2023, it was just over 3 million, a reflection of fewer houses being built. Meanwhile, many homeowners were able to secure mortgage rates below 3 percent by buying or refinancing in 2020 and 2021; today, with rates in the 6 percent range, they are reluctant to sell, and home sales in recent months have been lower than any time since the Great Recession.
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