Homebuyers Getting Older as Younger Consumers Barred From Housing Market
The typical American homebuyer is older than ever before, National Association of Realtors data shows.
The association’s 2024 Profile of Home Buyers and Sellers — the subject of a Bloomberg News report Monday (Nov. 4) — shows that the age of a typical homebuyer was 56, an all-time high.
It’s a situation that’s developed as many younger buyers find themselves priced out of the housing market, while older Americans use their home equity for cash purchases or to make big down payments.
The report also showed the share of first-time homebuyers shrunk to 24%, the lowest level since the association began recording the figures in 1981.
The median age of a first-timer was another record – 38, a decade older than in the 1980s, the report said.
Steep borrowing costs and high prices have led to a divided housing market, one where sales increasingly go to repeat buyers and wealthier families. The median income for first-time buyers is now $97,000, up from $71,000 two years ago.
The report also shows a major increase in the number of single-women first-time buyers from a year earlier, with women making up 20% of the market, compared to 8% of single men.
And buyers are also increasingly white, at 83%, compared to 81% last year. Around 7% of recent buyers identified as Black, 6% as Hispanic, 4% Asian, and 3% as some other ethnicity, the report said.
The association’s findings come weeks after Fannie Mae’s Economic and Strategic Research (ESR) Group released findings on the American economy projecting that annual home prices would grow 5.8% in 2024 and 3.6% in 2025, up from earlier forecasts of a respective 6.1% and 3%.
“While potential homebuyers have noticed the decline in mortgage rates over the last few months, they are equally aware that there has been little relief on the home price side, the other primary driver of unaffordability, particularly for first-time buyers,” Fannie Mae Chief Economist Mark Palim said.
“The timing of the long-expected pickup in home sales activity, as well as a further moderation in home price appreciation, will depend in part on the willingness of current homeowners to relinquish their low mortgage rates by offering their homes for sale.”
On the other end of the spectrum, research by PYMNTS Intelligence finds that lower-income consumers are increasingly pressured by housing costs, which can eat up around 37% of take-home pay for people making less than $50,000 per year.
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