Residential Real Estate News
Market Share of First Time Home Buyers Hit Historic Low in U.S.
The National Association of Realtors' newly released 2024 Profile of Home Buyers and Sellers report reveals a historic low in first-time U.S. homebuyer market share, which dropped to 24% from 32% last year. The report also notes a rise in buyers' ages, with an average of 56 years overall (up from 49 last year), 38 years for first-time buyers (up from 35), and 61 years for repeat buyers (up from 58). This annual survey, covering transactions between July 2023 and June 2024, has been NAR's flagship report since 1981, providing insights into trends in home buying and selling.
According to NAR Deputy Chief Economist Jessica Lautz, "The U.S. housing market is split into two groups: first-time buyers struggling to enter the market and current homeowners buying with cash." She explains that high home prices, high mortgage rates, and low inventory mean first-time buyers are older and have higher incomes than previous generations. Conversely, current homeowners can leverage home equity for cash purchases or substantial down payments on larger homes.
The report shows a median household income of $108,800 for all home buyers in 2023, up from $107,000 in 2022. First-time buyers' median income rose to $97,000 from $95,900, and repeat buyers to $114,300 from $111,700. Married couples comprised 62% of buyers, with single female buyers increasing slightly to 20%, while single male buyers dropped to 8% and unmarried couples to 6%. Single female first-time buyers also saw a 5% increase.
In terms of diversity, 83% of recent buyers identified as White or Caucasian, while 7% identified as Black or African American, 6% as Hispanic or Latino, 4% as Asian or Pacific Islander, and 3% as another ethnicity. Additionally, 73% of recent buyers did not have children under 18 at home, marking the highest recorded rate.
Multigenerational home purchases also rose to 17%, the highest in the data series, driven by factors like cost savings (36%), caregiving for aging parents (25%), adult children returning home (21%), and adult children who had never moved out (20%). Lautz noted, "With an unaffordable housing market, many families are doubling up. Cost savings are crucial, and prohibitive rental and home prices mean young adults are staying home or returning. Older relatives are also moving in as priorities shift."
Real estate agents played a vital role, with 86% of buyers using their services, the highest rate among information sources. Agents were deemed the most valuable resource during home searches, with 88% of purchases made through an agent or broker. Nearly 90% of buyers reported satisfaction with their agent's responsiveness, knowledge, honesty, and people skills, and 88% would recommend or reuse their agent.
In 2024, median down payments were 18% for all buyers, 9% for first-time buyers, and 23% for repeat buyers--the highest levels since 1997 for first-timers and 2003 for repeat buyers. First-time buyers relied mainly on savings (69%), while 25% used loans or gifts, 21% used financial assets, and 7% used inheritances. A record 26% paid in cash.
The typical seller's age rose to 63 years, with 69% of sellers being married couples, up from 65%. Top reasons for selling included a desire to be closer to family and friends (23%), needing a smaller home (12%), a home that felt too large (11%), and a less desirable neighborhood (10%).
Lautz noted that family connections strongly influence real estate decisions: proximity to friends and family is now a primary reason to sell, while convenience to family and friends is increasingly important for buyers. Less emphasis is placed on work locations, perhaps due to more older repeat buyers and ongoing remote work flexibility.
Most sellers (90%) used an agent, up from 89%, with only 6% choosing for-sale-by-owner, an all-time low. The majority (87%) of sellers said they would definitely (72%) or probably (15%) recommend their agent for future transactions.
