First-Time Homebuyer Facts and Statistics (2024)

With challenges like rising interest rates and high home prices, many prospective homeowners are having a tough time with their first home purchase, according to a CNBC report. The average age of the first-time homebuyer hit a new all-time high in 2022, now at 36 years old (up from 33 in 2021), according to the National Association of Realtors (NAR).

While first-time home buying may be difficult in most areas of the country, the lure of homeownership remains a powerful pull for young Americans. To get a sense of the state of homebuying, we gathered first-time homebuyer data, homeowner statistics based on age and race, and projections showing where these trends are headed.

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Top First-Time Homebuyer Facts and Statistics

In the current economic and real estate environment, many Americans are finding it difficult to save enough for a down payment. Data shows that there is still a demand from first-time buyers, though. Here are some statistics that highlight recent first-time homebuyer trends: 

• Just 26% of homebuyers were first-time buyers in 2022, an all-time low.¹
• Unmarried couples made up 18% of first-time buyers, an all-time high.¹
• The average age of a first-time buyer is 36 years old in 2022, an all-time high.¹
• Saving for a down payment is a major barrier for potential first-time homebuyers attempting to purchase their first home, with 27% of younger millennials citing it as the most challenging step in purchasing a home in 2022.²
• The top reported reason for buying a home was the desire to be a homeowner, with 62% of first-time buyers having this as their top priority in 2022.²
• Too much debt is the most common reason mortgage lenders reject homebuyers’ loan applications, with 32% of rejections coming from an insufficient debt-to-income ratio. This was the greatest issue for homebuyers between the ages of 23 and 31, at 46% of rejections, in 2022.²
• The average first-time homebuyer median credit score was 768 as of the second quarter of 2022.³
• The average monthly income of first-time buyers was $7,453 as of 2020.⁵
• The average first-time homebuyer’s down payment was 6% of the home’s purchase price in 2022.¹ 
• The number of houses on the market and the share of purchases made by first-time buyers are expected to rise back to pre-pandemic norms by 2024, based on early 2022 data collection. Housing inventory should increase back to a monthly average of 1.5 million units or higher.⁶
• For 61% of 2022 homebuyers, their down payment came from their savings.² 
• First-time buyers made up 34% of 2022 home purchases.²

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Homeowner Statistics by Age

Home buying habits vary by generation. 

• First-time millennial buyers were more likely to take risks in 2022, with 90% purchasing a home sight unseen, 82% purchasing a fixer-upper, and 80% offering over the asking price.⁴
• Younger millennials (born 1990–1999) made up only 18% of homebuyers in 2022, while older millennials (born 1980–1989) made up 25% of buyers (the largest group).² 
• Baby Boomers made up more than 40% of homes owned in the United States in 2022.² 
• Millennials made up 43% of homebuyers in 2022, the most of any generation.²

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Homeowner Statistics by Race

According to NAR, the largest homeownership rate gains in the last decade have been made by Asian Americans and Hispanics. Below is a snapshot of how demographics overlap with homeownership. 

• Hispanic and Asian Americans have seen the biggest homeownership rate gains in the past decade, now sitting at 51% and 63%, respectively.⁷
• Homeownership rates for Black Americans rose by 0.4 percentage points from 2011 to 2022, but still remains the lowest of any race/ethnicity at below 45%.⁷
• The majority of U.S. homeowners are White as of 2022 (72.7%).⁷
• The majority of homebuyers in 2022 were White (88%), followed by Hispanic/Latino (8%), Black/African American (3%), Asian/Pacific Islander (2%) and Other (3%).⁷

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Characteristics of Homeownership

Buyer profiles in 2022 show that married couples are still far more likely to purchase a home than unmarried couples. However, the percentage of married couple homebuyers has decreased by 12 percentage points since NAR data collection started in 1981, from 73% to 61% in 2022.

In that same time frame, single female homebuyers have increased by 6 percentage points, and single male homebuyers have decreased by 1 percentage point.

Source: NAR

• In 2022, single women outnumbered single men as homebuyers, 19% to 9%.²
• Of all homebuyers in 2022, 31% had children under the age of 18 living at home.²
• The majority (72%) of homebuyers in 2022 had earned a bachelor’s degree or higher.²
• Multigenerational homes made up 14% of homes purchased in 2022.¹

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Our Conclusion

These first-time homebuyer statistics display the difficulty of the housing market within the last few years. The average age of the first-time homebuyer hit an all-time high of 36 in 2022. Younger prospective homeowners are struggling to secure financing to buy a home. Mortgage lenders are citing too much debt as the top reason for rejecting a loan, and two-thirds of millennials report that they have nothing saved for a down payment.

Real estate experts predict mortgage rates and home prices will “return to normalcy” in 2023. But the only certain thing is that the housing market is always changing.

“The housing market is complex and constantly evolving, and it’s important for buyers and sellers alike to stay informed about market trends and conditions,” said Phil Greely, a licensed real estate agent in Seattle, Washington.

With such uncertainty, it’ll be a waiting game to see how first-time homebuyer trends will look a year from now. If you recently closed on a home and are planning your move, check out our guide to the best affordable moving companies and our tips on how to save during the moving process.

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Sources

1. Copyright ©2022 “Profile of Home Buyers and Sellers.” NATIONAL ASSOCIATION OF REALTORS®. All rights reserved. www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers
2. Copyright ©2022 “Home Buyers and Sellers Generational Trends Report.” NATIONAL ASSOCIATION OF REALTORS®. All rights reserved. https://cdn.nar.realtor//sites/default/files/documents/2022-home-buyers-and-sellers-generational-trends-03-23-2022.pdf
3. “Quarterly Report on Household Debt and Credit.” Federal Reserve Bank of New York. November 2022. https://www.newyorkfed.org/medialibrary/interactives/householdcredit/data/pdf/HHDC_2022Q3 
4. “Millennial Home Buyer Report: 2022 Edition.” Real Estate Witch Powered by Clever. January 17, 2022. https://www.realestatewitch.com/2022-millennial-home-buyer-report/ 
5. “Mortgage Costs as a Share of Housing Costs – Placing the Cost of Credit in Broader Context.” Fannie Mae. March 9, 2022. https://www.fanniemae.com/media/43026/display 
6. “Experts Predict at Least Two More Years Before Housing Inventory Climbs to Pre-Pandemic Levels.” Zillow. March 24, 2022. https://www.zillow.com/research/zhpe-q1-2022-inventory-returns-30878/ 
7. Copyright ©2023 “A Snapshot of Race and Home Buying in America.” NATIONAL ASSOCIATION OF REALTORS®. All rights reserved. https://cdn.nar.realtor/sites/default/files/documents/2023-snapshot-of-race-and-home-buying-in-the-us-03-02-2023.pdf

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