The share of first-time homebuyers has dropped to a record low, struggling to compete in a U.S. housing market that’s inundated with older, whiter and wealthier buyers.
That’s according to the National Association of Realtors’ annual profile of homebuyers and sellers released Thursday.
First-time homebuyers at record low
The share of first-time homebuyers navigating today’s housing market has dropped to just 26% — the lowest share the National Association of Realtors has seen in the over 40 years it’s published its report.
That’s a big drop from 34% last year and a peak of 50% in 2010.
“It’s not surprising that the share of first-time buyers shrank to the lowest level ever recorded given the housing market’s combination of historically low inventory, persistently high home prices and rapidly escalating interest rates,” said Jessica Lautz, vice president of demographics and behavioral insights for the National Association of Realtors.
White homebuyers are dominating housing market
White buyers make up 88% of all homebuyers — up from 82% a year ago — a figure that overwhelmingly outnumbers buyers of other races. Only 8% of buyers were Hispanic Americans, 3% were Black Americans and 2% were Asian Americans, according to the report.
While the shares for white and Hispanic Americans increased from a year ago, shares of Black and Asian Americans declined, both down from 6% last year.
“Housing affordability and limited inventory impacted the buying power of all buyers, however, the greatest impact was felt by Black and Asian Americans, as both groups saw a shrinking share of home buyers,” Lautz said.
“Conversely, White and Hispanic Americans experienced gains in buyer shares. Population growth among Hispanic Americans likely drove the increase, while many White Americans are repeat buyers with housing equity that allows them to make easier trades in today’s market.”
Homebuyers are getting older
The age of the typical first-time buyer was 36 years — up from 33 years a year ago. Additionally, the typical repeat buyer’s age climbed to 59 years, up from 56 years last year.
“Both ages are the highest in the history of the data set. The median expected home tenure for first-time buyers was 18 years, the highest ever recorded and up from 10 years in 2021,” the report states.
The report also illustrates buyers with existing wealth — whether it be equity or inherited — are enjoying a clear advantage in today’s market.
“Those who have housing equity hold the cards and they’ve fared very well in the current real estate market,” Lautz said. “First-time buyers are older as a result of saving for down payments for longer periods of time or relying on a generational transfer of wealth to propel them into homeownership.”