Homes have been getting more expensive for decades, but higher prices have been taking more of a toll on younger generations. A recent NBC News report revealed that the average age of first-time homebuyers reached a new record: 38 years old. This finding is based on data compiled by the National Association of Realtors.
The couple featured in the video were right on the mark of the new average age. The wife works in insurance and is 37 years old. She's married to a 38-year-old police officer, and they have one child in Landsdale, Pennsylvania. The couple hopes to have a second child as well.
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Housing prices have soared for several reasons, and it's ultimately kept many young people out of the market. Real estate agent Ricky Boone told NBC that it's the toughest market he's ever seen.
“No one in their young 20's are buying homes," Boone explained.
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The Average Age Of First-Time Homebuyers Has Been Steadily Increasing
NBC News looked at the average age of first-time homebuyers across multiple decades, and it shows that this group of homeowners has been getting older.
The NAR reported that back in 1980, the average first-time homebuyer was only 29 years old. That number ticked up to 35 years old in 2023. However, in just one year, the figure has now jumped to 38 years old.
NBC News mentioned high prices, low inventory, and high mortgage rates as the three main reasons houses remain inaccessible for many young homeowners.
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Housing Affordability By The Numbers
According to Redfin, the median monthly mortgage payment reached a record $2,800. It's a significant portion of most families' incomes. U.S. Census Bureau data showed that the real median household income was $80,610 in 2023. That comes to $6,717.50 per month.
These figures indicate that the average person has to put 41.7% of their monthly income toward mortgage payments. It's much higher than the suggested 28% figure, but it is a reality that many first-time homebuyers face.
NBC News also mentioned NAR data that highlights 70% of American families cannot afford a $400,000 home. Meanwhile, data from the Federal Reserve Bank of St. Louis indicated that the national median sales price is approximately $420,000.
Bidding Wars Have Only Made It Worse
Even though first-time homebuyers can barely keep up with current prices, there isn't much of an option. A low housing supply results in bidding wars for the few houses that enter the market. High interest rates have also made people feel more comfortable with staying put in their current homes instead of moving out.
Boone showed NBC News a house that sold for $209,000 in 2009. Now, that same home is currently listed for almost half a million dollars. Bidding wars can make the problem worse before it gets better, but homebuyers will eventually hit a breaking point if the trend continues.
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