WASHINGTON–Ongoing mortgage rate increases are being blamed for new data showing the number of first-time homebuyers is at an all-time low. The first-time buyers were also the oldest they have ever been.
The new numbers from the National Association of Realtors reveal first-time homebuyers comprised 26% of all homebuyers in the year ending June 2022, down from 34% the year before, according to NAR’s 2022 report on homebuyers and sellers. That was the lowest in the survey’s 41-year history, the NAR said.
The share of buyers purchasing a first home has sat between 30% and 40% over the past decade and reached as high as 50% in 2009, according to the organization.
Average Age Rises
Meanwhile, the age of a first-time homebuyer also rose, with the typical age reaching 36 years old, up from 33 in 2021. The typical repeat buyer’s age also climbed, reaching 59 years old, up from 56. Again, both are all-time highs according to the NAR.
Other findings in its research:
- The median household income for first-time buyers slipped to $71,000 during the year ended June 2022, down from $86,500 in the previous 12-month period. Meanwhile, repeat buyers had a median income of $96,000, down from $112,500 the previous year.
- Buyers typically purchased their homes for 100% of the asking price, the research showed, with 28% paying more than the asking price.
A ‘Key Role’
“For first-time homebuyers, the lack of affordability is playing a key role in holding them back from homeownership,” said Jessica Lautz, NAR’s vice president of demographics and behavioral insights, in a statement. “They don’t have the equity that repeat buyers have for a down payment or to buy in cash. They have to save while paying more for rent, as well as student debt, child care and other expenses, and this year were facing increasing home prices while mortgage rates are also climbing.”
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