The average age of homebuyers is now 56, up from 49 in 2023, according to the National Association of Realtors

A report from the National Association of Realtors (NAR) reveals that the median age of homebuyers has climbed to a record high of 56 this year, up from 49 in 2023 and just 31 back in 1981. Compounding this trend, the share of first-time homebuyers has hit an all-time low, accounting for only 24% of the market. These shifts have left many millennials and Gen Zers feeling that the American Dream of owning a home is slipping out of reach.

The challenges are undeniable. Since 2020, home prices have surged by 39%, with mortgage rates climbing in tandem. For younger generations, this combination of rising costs and limited access to affordable options raises concerns that their dream of homeownership may remain elusive.

What Caused This Shift?

The pandemic has played a significant role in reshaping the housing landscape. In response to the economic upheaval, the U.S. government slashed interest rates, resulting in historically low mortgage rates, according to Christy Bunce, president of New American Funding.

"Many current homeowners locked into these low rates are reluctant to sell and trade up, which has reduced the supply of starter homes," Bunce explained. "At the same time, increased activity from investors and second-home buyers has further driven up prices."

Adding to these pressures, homebuilders have struggled to meet demand due to rising material costs and labor shortages, pushing prices even higher. These trends have coincided with millennials and Gen Zers reaching peak homebuying ages, typically from their 20s to early 40s, further intensifying the competition for homes.

Will the Housing Market Cool Off?

While many hope for relief, significant declines in housing costs don’t appear imminent. "These high prices are here to stay, at least for now," said Alexei Morgado, a Florida-based real estate agent and founder of Lexawise, a real estate exam preparation firm.

For now, young buyers face an uphill battle, navigating a market shaped by limited supply, soaring costs, and stiff competition, leaving the future of affordable homeownership uncertain.