The average age of first-time U.S. homebuyers is 38, an all-time high

First-time homebuyers in the U.S. are getting older.

The median first-time homebuyer has reached an all-time high age of 38 years old, three years older than in July 2023, according to the National Association of Realtors’ 2024 Profile of Home Buyers and Sellers report. This summer, the NAR polled 5,390 buyers who purchased a primary residence between July 2023 and June 2024.

In the 1980s, the typical first-time buyer was in their late 20s.

“The first-time homebuyer who can enter into today’s market is older, has a higher income [and] is wealthier,” said Jessica Lautz, deputy chief economist at NAR, pointing out that higher home prices require bigger down payments.

Additionally, the share of first-time homebuyers on the market decreased over the past year from 32% to 24%, the lowest since NAR began collecting data in 1981.

Factors including the nationwide housing shortage, competition against wealthier buyers and high rent prices make it more difficult for younger adults to buy their first home, according to experts.

The housing shortage in the U.S. is “the biggest issue of housing today,” said Orphe Divounguy, senior economist at Zillow.

As of mid-2023, there is a housing shortage of four million homes, according to the NAR. Construction of new homes has been slow in recent years, and more buyers are competing for available homes, pushing up prices.

“We do need affordable housing,” said Jonathan Scott, co-host of the HGTV series “Property Brothers.” “It’s going to affect all of us if we don’t start acting now.”

During a recent CNBC Your Money event, Scott said a sustained housing shortage could dramatically influence first-time buyers over the long run. “Give it another 20 years and literally no young person will be able to afford to purchase a home, period,” Scott said.

Building activity has somewhat improved. Single-family housing starts in the U.S., a measure of new homes that began construction, grew to 1,027,000 in September, according to U.S. Census data. That is a 2.7% jump from August.

Yet, “we are still in a very, very constrained market,” said Selma Hepp, chief economist at CoreLogic. “Because of fewer homes on the market, you have more pressure on home prices.”

In August, the cost of a typical starter home was $250,000, up from $240,000 a year prior, according to Redfin.

The housing market is dominated by repeat homebuyers and sellers, or those who have owned and sold homes more than once. Prior homeownership gives them access to home equity to tap, in some cases enough to buy homes outright.

About a quarter, or 26%, of homebuyers paid cash for their home, an all-time high for cash buyers, the NAR found.

U.S. homeowners with mortgages have a net homeowner equity of more than $17.6 trillion in the second quarter of 2024, according to CoreLogic. Home equity increased in the second quarter of this year by $1.3 trillion, an 8.0% growth from a…