Norbert Michel and Jerome Famularo
Politicians, commentators, and lobby organizations alike have been sounding the alarm that the increasing age of first-time homebuyers is the latest evidence of a housing affordability crisis. But do the data really support that view?
Many, if not most, of these claimants are getting their numbers from the National Association of Realtors’ (NAR) 2024 Profile of Buyers and Sellers survey. The survey, taken together with previous NAR surveys, suggests that the median age of first-time homebuyers in the United States went from 29 in 1981 to 32 in 2000 to 33 in 2021 to a whopping 38 in 2024.
The increase in median first-time homebuyer age from 29 to 33 over a 40-year period is not drastic, so there doesn’t seem to be much of an issue between 1981 and 2021. The median age was 32 for most surveys between 1993 and 2006, and it actually declined to 30 during the Great Recession and immediately after.
But, according to the NAR surveys, the median age increased from 33 in 2021 to 36 in 2022, 35 in 2023, and 38 in 2024. Aside from the fact that home prices rapidly spiked between 2021 and 2023, the drastic and unprecedented increase in the median first-time homebuyer age is worth investigating. It is of particular importance to have correct numbers in an era where many are painting a narrative of a housing “crisis” that must be targeted with ever more government interventions in the housing market, whether through building subsidies, grants, or other means.
For starters, it is worth comparing the NAR survey results with other estimates. For instance, the Census Bureau’s American Housing Survey (AHS) provides data on housing, including whether the respondent is a first-time homebuyer and their age.
Interestingly, the AHS data (most recently available in 2023) closely track the NAR data for most of the previous 25 years. However, a notable divergence occurs in 2022, when the NAR data report an increase to age 36, and the AHS remained steady at 33. (See Figure 1.)
This divergence begs the question: which median age estimate is closer to the truth? Did the median first-time homebuyer age increase dramatically, or did it stay approximately the same? It is difficult to know for sure, but we can compare these results to age cohort data calculated by the American Enterprise Institute’s Housing Center.
Using HMDA and Agency MBS data, the AEI Housing Center has calculated the percentage breakdown of first-time homebuyers by age group. Data are available from 2018 to 2024, and unlike the AHS and NAR estimates, these figures are not subject to survey response bias since they consist of anonymized loan-level data. (See Table 1.)
The data are mostly unchanging over the period. While the share of first-time homebuyers between the ages of 25 and 34 shrank by 1.2 percentage points over the period, the share of those under 25 increased by 1.4 percentage points. The median value is within the 25–34 age bracket the entire time, since over half of first-time homebuyers are below the age of 34 in every single year. (See figure 2.)
The consistency of the figures during this period casts doubt on the drastic increase in 2022 indicated by NAR data. Taken together, these data suggest caution in treating the NAR figures as definitive and raise doubts that the typical first-time buyer age is suddenly approaching 40.
Regardless, policymakers should not overreact to a possible increase in the median first-time home buyer age. Americans are going to college in increasing numbers and entering the workforce later as a result. They are having fewer children and doing so later in life, potentially reducing the demand for homeownership for young families with children. These trends, seen internationally, do not constitute a crisis, nor do they warrant increased government intervention in housing.
The authors would like to thank Tobias Peter and Sissi Li of the American Enterprise Institute’s Housing Center for their invaluable data contribution.