Yikes! Average Age of U.S. Homebuyers Hits Record High

The average age of U.S. homebuyers increased once again in 2024, as young Americans continue to compete for homes.

I'm not sure if homebuying has ever really been a fun or exciting process, because in my experience, it's just been downright stressful. At 25 years old, I'm currently on my second home, but it has taken a lot of hard work to get this far. Many in my age group are still struggling to live the American dream as housing prices continue to soar and interest rates remain fairly high. In fact, one real estate expert now describes the majority of homes as "wildly unaffordable" for young people.

Average Age of U.S. Homebuyers Up 14% from 2023

In the National Association of Realtors' (NAR) annual State of the Market report, it was revealed that the average age of U.S. homebuyers is now a shocking 56 years, up from 49 in 2023. CNBC reports that this number is a historic high and a sign that more and more young people are being priced out of the housing market. Currently, the median U.S. home price is $435,000, which has risen 39% since 2020. Meanwhile, the average 30-year fixed mortgage rate has more than doubled to over 6% during that time.

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Young People Struggle Amid Housing Market War

When it comes to the median age of first-time buyers, that number rose from 35 to 38, while the share of first-time buyers dropped from 32% to 24% of all buyers for the year ending July 2024. That marks the lowest percentage of new homebuyers since the NAR started tracking the metric in 1981. CNBC reports that the biggest challenge young people are facing is saving for a down payment while juggling soaring rent prices, student loans, and so forth. However, even if they can come up with the cash, many are still outbid by wealthier home shoppers with existing equity from other homes.

Are Home Prices Expected to Decrease in 2025?

According to Money.com, the housing market outlook for 2025 has received mixed predictions. At the low end, the NAR projects a year-over-year price increase of 2%, while Zillow expects an increase of 2.6%. On the higher end of the range are Realtor.com and Redfin, which forecast year-over-year price growths of 3.7% and 4%, respectively. However, it is important to note that each of these rates is significantly better from the double-digit price increases seen over the last few years.

Another aspect of the equation real estate experts are considering is inventory. Money.com notes that the housing supply remains nearly 30% below pre-pandemic levels, but recent data suggests some parts of the country are working toward meeting the demand. Additionally, mortgage rates are expected to decrease over the next 12 months, offering yet another glimmer of hope for potential homebuyers. That said, only time will tell if the situation and affordability of homeownership improve overall.