U.S. Homebuyers Are Now 56 On Average As Younger Generations Struggle With 'Wildly Unaffordable' Market, Housing Expert Warns

The average age of U.S. homebuyers has climbed to 56, a sharp increase that underscores just how much young Americans are struggling in today's housing market. High homeownership costs, rising mortgage rates and other economic burdens create steep hurdles for Millennials and Gen Z who increasingly find themselves on the sidelines of homeownership. 

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The latest annual report from the National Association of Realtors (NAR) revealed that the average age rose from 49 to 56 since July 2023, marking a historic high compared to the low-to-mid 40s seen in the early 2010s.

The situation is not easy for first-time buyers, who face a median age of 38, up from 35 and a market share dropping from 32% to 24% – the lowest rate since NAR began tracking these statistics in 1981. 

The drop reflects a market becoming less accessible as home prices and mortgage rates continue to rise. In October 2023, mortgage rates reached 8%, a massive leap from record lows during the pandemic, pushing monthly payments sharply upward. 

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For young adults already burdened by student loans and high living costs, buying a home feels less like a milestone and more like a distant dream. "In my two decades in the mortgage business, I've never seen a more difficult time for Millennials to purchase a home," says Bob Driscoll, a senior vice president at Rockland Trust.

One of the biggest obstacles is saving for a down payment. According to NAR, the median U.S. home price is now $435,000, up 39% since 2020. For an 18.6% down payment, the median amount buyers put down, young buyers need roughly $78,300. According to the U.S. Census Bureau, that's nearly equivalent to the annual U.S. median household income of $80,610. 

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"Homebuying for the younger generation is wildly unaffordable," notes Noah Damsky of Marina Wealth Advisors. For many younger buyers, their median income only covers the essentials, making additional savings for a home all the harder to achieve.

Complicating matters further, younger buyers are increasingly outbid by older, wealthier individuals, many of whom bring equity from homes they already own. In October, the share of all-cash buyers, often less reliant on financing, surged to 28% from 20% a year prior.

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This shift makes financing costly and inaccessible for young buyers without deep pockets or family assistance. Nearly a quarter of first-time buyers rely on financial help from family or friends for down payments.

The market's affordability crisis pushes young buyers to reconsider where and what they buy. Some analysts suggest potential relief if the Federal Reserve stabilizes interest rates, which might lead to slightly better financing conditions. There's also a growing trend of Millennials exploring smaller homes or co-buying with friends hoping to break into homeownership creatively.

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