The housing market is tough right now, especially for first-time buyers. Prices are high, and mortgage rates are climbing, making it hard for many to find an affordable home. According to a recent report from the National Association of Realtors, fewer first-time buyers are entering the market than ever before.
Jess Lautz, deputy chief economist at the Realtors’ association, noted that the average age of a first-time buyer is now 40, significantly up from past years. In fact, first-time buyers accounted for just one in five homes sold over the last year—a staggering decline compared to previous generations.
“It shows real problems in the housing market that need addressing,” Lautz says. “The lack of inventory makes it difficult for young adults to purchase homes, which are often their biggest investments.”
One couple, Eve and Cael Burdick, recently shared their struggles. At 30, they hoped to buy a home after their wedding but feel priced out in Minneapolis. Even with homes priced below the national average, they find properties either too expensive or needing extensive repairs they can’t afford. “We can’t buy a house for $350,000 and then borrow more to fix it up,” Eve explained.
The current housing crisis is not only affecting new buyers but also existing homeowners. People are staying in their homes longer—averaging 11 years before selling, according to the same Realtors’ report. This reduces the availability of homes for sale, creating a gridlock in the market.
Many potential buyers are also dealing with financial challenges outside of home buying. High prices for everyday necessities are making it hard to save for a down payment. Eve and Cael are juggling student loans and medical debt, feeling they are falling behind. “We thought we’d buy a house within a year, but now it looks more like three or four years,” Eve said.
The sentiment is echoed by Sasha Skelton and her partner, who are already in their mid-30s. Despite both having stable jobs—she in HR and he in property management—they regret not purchasing a home a few years back when rates were lower. Now, they are concerned about job stability and rising costs of living. “Everything feels like it’s hitting us all at once,” Sasha stated. They’ve paused their house search, but the dream of owning a home lingers. “Having a place to put down roots is important to me,” she added.
This dilemma isn’t confined to these couples alone. A recent survey revealed that around 43% of renters in the U.S. consider the current market too intimidating to even start looking for homes. As the economy fluctuates and inflation affects buying power, many share the same frustration faced by the Burdicks and Skeltons.
As the market continues to evolve, experts warn that significant changes are required to enable a new generation of homeowners. For more details, you can check out the National Association of Realtors’ full report here: NAR Report.
