Stubbornly low inventory and high-interest rates have taken a toll on the housing market over the past year, leaving an indelible mark on homebuyers — particularly first-time buyers. The National Association of Realtors’ (NAR) 2024 Profile of Home Buyers and Sellers sheds light on the challenges and demographic shifts reshaping the landscape of American homeownership.
The Decline of First-Time Buyers and Aging Demographics
A striking trend in the report is the historic decline in first-time homebuyers, who represented just 24% of all buyers from July 2023 to June 2024, compared to 32% the year prior. This marks a significant drop from the pre-2008 housing crisis era, when first-timers often made up 40% of the market.
Adding to this shift is the increasing age of homebuyers. The median age of first-time buyers rose from 35 to 38 in just two years, compared to the late 20s median typical of the 1980s. Among all buyers, the median age jumped from 49 to 56 this year, while repeat buyers now average 61 years old — both record highs.
Fewer Children, More Intergenerational Living
Despite the aging demographic, fewer homebuyers are raising children at home. NAR found that 73% of buyers did not have children under 18 living with them — a stark contrast to the late 1980s, when nearly half of all buyers had children at home. This percentage has been steadily rising, reflecting changing family dynamics and lifestyle choices.
However, multigenerational households are on the rise, with 17% of buyers reporting living arrangements that include extended family, such as grandparents — another record high.
Who Is Buying?
While married couples remain the majority of buyers at 62%, single women made notable gains, increasing from 19% to 24% of all buyers over the past year. Meanwhile, unmarried couples held steady at 12%.
Racial diversity among buyers remains relatively unchanged. White buyers comprised 83% of all buyers, up slightly from last year, while Black buyers represented 7%, Hispanics 6%, and Asians 4%. However, the first-time buyer pool was more diverse, with white buyers accounting for just 68% of this group.
Trends in Housing Preferences
Several trends point to shifts in buyer behavior and market conditions:
- Homes from the 1990s are back in demand: The median age of homes purchased reverted to its long-standing trend of early-to-mid ’90s builds, following a dip during the inventory crunch of 2022–2023.
- Urban living rebounds: Despite predictions of a mass urban exodus during the pandemic, buyers have largely returned to pre-pandemic preferences. Urban purchases saw a resurgence in 2024, outpacing levels seen in the years just before the pandemic.
- Higher down payments: First-time buyers now typically put down 9% of a home’s purchase price, the highest since 1997. Across the board, down payments are on the rise, with more buyers exceeding 20% to offset rising interest rates.
Challenges Ahead
As first-time buyers face increasing hurdles in entering the market, the broader trends point to a growing divide in affordability and access. Rising home prices, limited inventory, and high borrowing costs are reshaping what it means to be an American homeowner.
The 2024 housing market paints a picture of resilience and adaptation, but also highlights the need for policy and market solutions to address the challenges facing first-time buyers and create pathways to homeownership for future generations.
