“This data really puts numbers behind what many of us have been talking about,” said National Association of Realtors® Deputy Chief Economist and Vice President of Research Dr. Jessica Lautz. “It really reflects the unaffordable housing market that we’re in.”
Dr. Lautz referenced NAR’s most recent Profile of Home Buyers and Sellers in PAR’s monthly webinar. Along with generational homebuyer demographics, she highlighted the wealth divide between homeowners and non-homeowners and the value that agents bring to the homebuying and selling processes.
“We have an all-time high of all cash buyers and an all-time low of first-time homebuyers,” she noted, citing high interest rates, high home prices and limited inventory as driving factors preventing first-time homebuyers from reaching homeownership.
This year, the number of first-time homebuyers hit an all-time low, making up only 24% of all buyers. The median age of first-time buyers also increased, reaching 38 years old. In comparison, 40 years ago, the median age was in the late 20s. Dr. Lautz noted that having to save more money, encountering lost housing bids and losing housing wealth have all been contributing factors pushing back the median age.
While many Americans may be hopeful that the “silver tsunami” – that is, the passing of homes and wealth from baby boomers to younger generations – will result in more homebuying opportunities for young millennials and Gen Zers, Dr. Lautz believes otherwise. Although 7% of all first-time buyers do turn to inheritance to help with their homebuying costs, baby boomers continue to be the most predominant homebuyers in the housing market, as well as the most predominant repeat buyers.
“I don’t think that the silver tsunami is a solution that we can count on here in the housing market,” Dr. Lautz said, noting that data indicates that many baby boomers plan to age in place, living in their current homes for 15 years or more. “We really just need to build more houses.”
Still, young buyers are finding other ways to break into homeownership. In 2024, multi-generational homebuying hit an all-time high of 17% of all homebuyers. Dr. Lautz cited the need for elderly caregiving and more affordability as causes driving this number. Co-buying also remains a method that young Americans are using to afford homes, whether with friends, partners or family. This year, half of first-time homebuyers were married.
Overall, although the housing market is unaffordable for many prospective first-time buyers, young Americans continue to pursue the dream of homeownership and the wealth that comes with it.
“Current homeowners in the U.S. have about $415,000 in wealth versus the typical non-homeowner of about $10,000,” Dr. Lautz added, emphasizing the divide in wealth between the two groups and the struggle young millennials and Gen Zers face to close it.
Another thing that remains consistent is the value of real estate agents in the homebuying and selling processes. Dr. Lautz noted that 89% of homebuyers and 90% of home sellers used an agent this year, and for sale by owner transactions hit an all-time low of 6%.
“What I would underscore and what has stayed exactly the same is agent use,” she said. “People want agents. They are using their agents. They are finding their agents through referrals. If someone calls you, they’re going to work with you if you call them back, because we see that they’re only reaching out to one person.”
“That’s something I would keep very top of mind,” Dr. Lautz continued. “We can see all these changes when we look at mortgage interest rates and we can see all these changes when we look at whether we need to build more in affordability and who these homebuyers are. But that relationship with you is staying exactly the same.”
To hear more of Dr. Lautz’s highlights, view this webinar’s recording on PAR’s website.
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