It’s harder than ever for first-time buyers to crack the housing market

As housing remains scarce, pricey, and out of reach, the share of first-time home buyers has hit an all-time low.

Just 21% of buyers were first-timers in the 12 months ending June 2025, the National Association of Realtors said in its 2025 Profile of Home Buyers and Sellers, released Nov. 4. That’s only about half the long-time average share of 38% in records going back to 1981.

Meanwhile, the average age of the first-time buyer rose once again, to 40.

“The implications for the housing market are staggering,” said Jessica Lautz, NAR’s deputy chief economist, in a statement. The market is increasingly bifurcated, Lautz said, noting “buyers with significant housing equity making larger down payments and all-cash offers, while first-time buyers continue to struggle to enter the market.”

The share of homes purchased with all cash also hit an all-time high in the past year, at 26%.

The report’s findings may say as much about the broader U.S. economy as they do about the housing market. Homeownership remains a dependable strategy for building generational wealth. A 2024 report from the Aspen Institute found that renters have a median net worth of just $10,400 compared to about $400,000 for homeowners – and that fewer than half of all renters have positive cash flow, or money left over after covering all necessary household expenses.

But as fewer and fewer Americans are able to break into the market for the first time, they’re shut off from those opportunities.

For anyone watching the housing market, the grim findings are no surprise. Home prices hit a new all-time high in 2024, with the median at $412,500. A borrower would need an annual income of at least $126,700 to afford a mortgage payment on a home of that price, using the traditional lender ratio of 31% debt to income, according to calculations from Harvard University’s Joint Center for Housing Studies.

More: Homeowners have nearly 40x the wealth of renters. What’s causing the wealth gap?

But half of all renters were “cost-burdened” as of 2023, the most recent data available, meaning they spend more than 30% of their income on housing and utilities, according to the Joint Center’s State of the Nation’s Housing 2025. That makes it harder to put aside money for a down payment and an eventual purchase.

This article originally appeared on USA TODAY: Record low number of first-time buyers in the housing market