U.S. housing affordability crisis drives median first-time buyer age to 40

The median age of first-time homebuyers in the United States has reached a historic high of 40 years old, according to data from the National Association of Realtors. This follows a trend where the typical age for first-time buyers was as low as 28 in 1991.

High prices and interest rates are significantly impacting affordability. A report from Zillow indicates that a record 242 U.S. cities now have starter homes costing $1 million or more, a significant increase from 80 cities prior to the pandemic. The Northeast has emerged as the fastest-growing region for these million-dollar starter homes, with New York and New Jersey seeing rapid increases in such cities.

Financial shifts are also evident in how homes are purchased. Approximately 1 in 10 first-time buyers are using all cash, a trend often linked to inheritances or family wealth transfers. This demographic of cash buyers typically has a higher median age of 54. While areas like the Bay Area face escalating prices due to the AI boom, some states such as Indiana, Iowa, and Texas are noted for better affordability and higher homebuilding rates.