First-Time Buyers Are Disappearing
First-time buyers were long the engine of the market at roughly 40% of purchases, the pipeline from renting to ownership. The 2025 NAR Profile puts them at 21%, a record low and close to half the pre-2008 norm.[1] The decline has accelerated rather than reversed.
First-Time Homebuyer Share of Purchases
Source: National Association of Realtors, Profile of Home Buyers and Sellers[1]
Who Is Buying Instead?
Repeat buyers, investors, and cash purchasers have filled the gap. The median buyer across all purchases is now 59, the oldest on record, with a household income of $114,000.
Older, Wealthier, and Still Struggling
The median first-time buyer is 40, up from 29 in 1981.[1] Other sources put it lower - the National Mortgage Database says 32-33 - but every series shows the same direction. More years renting means fewer years building equity, and less time for appreciation to work before retirement.
Median Age of First-Time Homebuyer (NAR)
Source: NAR Profile of Home Buyers and Sellers[1]. Note: MBA/National Mortgage Database estimates a more modest increase (30 to 33).[5]
The Generational Gap: 15 Points Behind at Age 30
The most revealing comparison is not across time periods but across generations at the same age. Using Census Bureau data, the homeownership gap between generations becomes starkly visible.[4]
At age 30, 48% of baby boomers owned homes against 33% of millennials, a 15-point gap, with Gen X at 42% in between.[4]
Homeownership Rate at Age 30, by Generation
Source: Census Bureau CPS/HVS, compiled by Apartment List[4]
| Generation | At Age 30 | At Age 35 | Gap vs. Boomers (Age 30) |
|---|---|---|---|
| Silent Generation | 55% | ~70% | +7 pts |
| Baby Boomers | 48% | 61.5% | Baseline |
| Generation X | 42% | 59.4% | -6 pts |
| Millennials | 33% | ~56% | -15 pts |
Sources: Census Bureau CPS, Apartment List[4], Berkeley Initiative for Young Americans[6]
The gap narrows with age - by 35 millennials trail boomers by about 5.5 points - but every year spent renting is a year of equity not built and appreciation not captured.
Why This Is Happening: Five Structural Forces
Five structural forces have tilted the market against first-time buyers. Each is measurable, and each operates independently of any individual buyer's behavior.
1. Prices Have Outrun Incomes
The median home price-to-income ratio has risen from approximately 3.6x in 1985 to 5.3x today.[2] Prices have grown 2-3x faster than incomes for four decades. A median-income household in 1985 needed roughly 3.6 years of gross income to buy a median home. Today it takes 5.3 years.
2. The Down Payment Wall
A 20% down payment on the median home now exceeds one full year of median household income - approximately $83,400 on a $417,000 home.[2] In 1990, the equivalent figure was roughly $24,800, or about one-third of a year's income. The down payment burden has effectively tripled. NAR reports that 26% of first-time buyers now tap retirement accounts to make a down payment.[1]
3. The Rent Trap
Nearly half of all renters - 22.6 million households - are cost-burdened, spending more than 30% of income on housing.[3] Among renters earning under $30,000, the figure is 83%. When rent consumes this much income, saving for a down payment becomes functionally impossible. This is a record high for the fourth consecutive year.[3]
4. Student Debt
Total outstanding student loan debt has more than tripled since 2007, from $516 billion to over $1.75 trillion.[7] The average borrower now carries approximately $39,000 in student debt.[7] Federal Reserve research has found that each $1,000 increase in student debt lowers the homeownership rate by 1.8 percentage points for borrowers in their mid-twenties.[8]
5. Competing Against Cash and Corporations
First-time buyers - who almost universally need mortgages - now compete against institutional investors paying cash, foreign buyers paying cash, and repeat buyers with equity from existing homes. In 2024-2025, 47% of foreign buyers paid all cash.[9] Institutional investors own 450,000+ single-family homes.[10] A family with a 30-day mortgage timeline cannot compete with a corporation that closes in 7 days.
The Down Payment Wall: A 20% Down Payment Over Time
The standard 20% down payment has transformed from an achievable savings goal into a barrier that takes years - in some cases over a decade - to overcome.[2]
| Year | 20% DP as % of Income | Detail |
|---|---|---|
| 1990 | ~34% | 20% DP on $124K home = $24,800 vs $29K income |
| 2000 | ~41% | 20% DP on $165K home = $33,000 vs $41K income |
| 2010 | ~45% | 20% DP on $223K home = $44,600 vs $50K income |
| 2024 | ~104% | 20% DP on $417K home = $83,400 vs $80K income |
Sources: FRED Median Sales Price[2], Census Bureau Income Data
The Math Does Not Work
At a savings rate of $500 per month, it now takes approximately 14 years to save a 20% down payment on the median home. Even with FHA's 3.5% minimum, it takes over 2 years at $500/month - and that is before accounting for mortgage insurance premiums that increase monthly costs by $200-400.[2] A generation that cannot save is a generation that cannot buy.
The Price-to-Income Ratio: Four Decades of Deterioration
The simplest measure of housing affordability - the ratio of median home price to median household income - tells the story clearly.[2]
What the Data Points To
The gap is the cumulative product of five structural forces, each of which the Act addresses directly.
| Force | What the Act does |
|---|---|
| 1Institutional investors bought starter homes and converted them to rentals | Prohibits corporate ownership of single-family homes |
| 2Immigration added over 1 million people a year for three decades | 10-year, 90% reduction to let supply catch up |
| 3Foreign capital bought $56 billion of housing in the most recent year | Requires permanent residency to purchase |
| 4H-1B suppresses skilled wages 17-34%, cutting the ability to save | Ends H-1B and restores the H-1 framework |
| 5Zoning and permitting left a shortage of 3.8 million homes | Federal incentives tied to jurisdictions that build |
The Wealth Consequences
Homeownership is the primary wealth-building mechanism for American families: the Federal Reserve puts median homeowner net worth at $396,500, roughly 38 times the median renter's.[10] Millennial wealth already lags previous generations at every age milestone, and the consequences of a generation locked out during its prime earning years reach past housing into retirement savings and intergenerational transfer.
Policy Response
Restoring the path to ownership means working both sides at once: reducing the forces that inflate demand and prices, and increasing the supply available to owner-occupants. On current trends the first-time share keeps falling and the median buyer keeps aging, until ownership is a privilege of the already-wealthy rather than a way to become so.