The share of first-time home buyers fell to historic low of 21% in 2025, according to the National Association of Realtors (NAR).
In addition, the median age of a first-time homebuyer increased to 40.
“The historically low share of first-time buyers underscores the real-world consequences of a housing market starved for affordable inventory,” says Jessica Lautz, deputy chief economist and vice president of research for NAR, in a statement. “The share of first-time buyers in the market has contracted by 50 percent since 2007 – right before the Great Recession. The implications for the housing market are staggering. Today’s first-time buyers are building less housing wealth and will likely have fewer moves over a lifetime as a result.”
As Lautz explains, the housing market right now “is a tale of two cities.”
“We’re seeing buyers with significant housing equity making larger down payments and all-cash offers, while first-time buyers continue to struggle to enter the market,” she says.
“For generations, access to homeownership has been the primary way Americans build wealth and the cornerstone of the American Dream,” says Shannon McGahn, executive vice president and chief advocacy officer for NAR. “Delayed or denied homeownership until age 40 instead of 30 can mean losing roughly $150,000 in equity on a typical starter home. FHA and VA programs have helped millions of Americans access homeownership, join the middle class, and create intergenerational wealth – a testament to smart government policy in support of homeownership.”
“Today, we must focus on policies that address the root cause of the affordability crisis: inadequate housing supply,” McGahn adds. “That means both unlocking existing inventory and enabling new construction. We need solutions that encourage more owners to sell, revitalize underused properties, streamline local zoning and permitting barriers, and modernize construction methods to build more homes faster and more affordably. These commonsense reforms make homes more affordable, restore opportunity, and help revive the dream of homeownership for generations to come.”
For the period June 2024-June 2025, the median down payment for a home was 10%, according to NAR’s data. That matches the highest level recorded since 1989.
The top sources for down payment included personal savings (59%); financial assets – such as a 401(k), stocks, or cryptocurrency (26%); and gifts or loans from family and friends (22%).
The median age for a repeat buyer was 62. Repeat buyers put down an median down payment of 23% – and 30% were all-cash buyers.
The lock-in effect means the homeownership tenure rate is at an all-time high: Among repeat buyers this year, the median time in home before selling was 11 years.
Photo: Peter Thomas