Executive Summary
- The median age of a first-time homebuyer in the U.S. has reached a record high of 40, according to the National Association of Realtors (NAR).
- Real estate investors continue to be a major market force, paying premiums in expensive states and seeking deep discounts in affordable ones.
- First-time buyers now represent a historic low of 21% of all home purchases, citing high rent and student debt as major financial barriers.
- Most new buyers today rely on their own savings for a down payment, a shift from previous years when family assistance was more common.
The U.S. housing market is facing a dual challenge as the median age of a first-time homebuyer has climbed to a record high of 40, while real estate investors continue to exert significant influence on supply and pricing. According to recent reports from the National Association of Realtors (NAR) and Realtor.com, these trends are intensifying the difficulties for new buyers trying to enter the market.
Investor Activity Shapes Regional Markets
A mid-year update from Realtor.com highlights divergent strategies used by investors depending on market affordability. In high-cost states such as California, Montana, and Utah, investors are frequently paying premiums up to 35% above typical sale prices. Conversely, in more affordable states like Michigan, Maryland, and Virginia, they are targeting discounted properties, sometimes purchasing homes for more than 50% below market value to maximize rental profits.
Danielle Hale, chief economist at Realtor.com, noted that although investors are purchasing fewer homes than during the pandemic’s peak, their access to cash and financing gives them a distinct advantage over average buyers. This sustained activity contributes to a larger investor market share, which can drive up prices for the limited inventory available, particularly in the affordable and mid-priced segments.
First-Time Buyers Face Growing Hurdles
Simultaneously, a national survey by NAR reveals that first-time buyers accounted for only 21% of home purchases between July 2024 and June 2025, a historic low. The median age for this group has risen to 40, a stark contrast to the late 20s average seen in the 1980s. High rent and student loan debt were cited as primary obstacles preventing aspiring homeowners from saving for a down payment.
The survey also found a shift in how down payments are funded. A majority of successful first-time buyers now rely on their own savings (59%) or investments (26%), with less reliance on financial gifts or loans from family, which were more common in the past. Jessica Lautz, NAR’s deputy chief economist, warned of the long-term consequences, stating, “The historically low share of first-time buyers underscores the real-world consequences of a housing market starved for affordable inventory.”
A Challenging Outlook
The combination of persistent investor demand and the mounting financial challenges for new buyers paints a complex picture for the housing market. With fewer first-time buyers able to build housing wealth, the implications for long-term market mobility and economic stability are significant.
