In a significant shift within the U.S. housing market, the share of first-time homebuyers has plummeted to a historic low. According to the latest data from the National Association of Realtors (NAR), first-time buyers now constitute only 24% of the market, a steep decline from 32% last year. This marks the lowest share since NAR began collecting this data in 1981.
The median age of first-time buyers has also increased, reaching 38 years old this year, up from 35 last year. Similarly, the age of repeat buyers has risen to 61 from 58. These changes reflect broader demographic shifts and economic pressures affecting the housing market, according to NAR.
The composition of homebuyers reveals that 62% are married couples, while single females account for 20%, single males 8%, and unmarried couples 6%. Notably, 73% of recent buyers do not have children under 18 living at home, the highest recorded share.
Multigenerational homes are increasing
This demographic trend is influencing the types of homes being purchased, with 17% opting for multigenerational homes. The primary motivations for these purchases include cost savings (36%), caring for aging parents (25%), and accommodating adult children returning home (21%).
The desire to own a home remains a strong motivator, cited by 22% of buyers overall and 64% of first-time buyers. The market continues to favor previously-owned homes, with 85% of buyers choosing them over new constructions. Those opting for new homes often seek to avoid renovation issues, while those choosing previously-owned homes perceive them as offering better value.
Detached single-family homes remain the most popular choice, accounting for 75% of purchases. The median distance between new and previous homes has decreased to 20 miles, down from 50 miles last year, indicating a trend towards closer relocations.
Key factors influencing decisions
Neighborhood quality, proximity to friends and family, and affordability are key factors influencing buyers' decisions. The typical home purchased was built in 1994, a shift from the 1980s homes favored in recent years.
The internet plays a crucial role in the home buying process, with 43% of buyers starting their search online. Real estate agents remain vital, assisting 86% of buyers, and 88% of transactions involved an agent or broker. Most buyers found their agents through personal referrals, underscoring the importance of trust and personal networks in real estate.
Overall, 59% of buyers reported being very satisfied with their purchase process, highlighting the continued reliance on professional guidance in navigating the complexities of the housing market.