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First-Time Buyer at Any Age: What 2025 Trends Reveal About Who’s Really Buying Homes

First-Time Buyer at Any Age: What 2025 Trends Reveal About Who’s Really Buying Homes

Recent data on the housing market and homebuyers paints a picture of a shifting buyer landscape. Many homebuyers may face the obstacle of housing affordability, fueled by relatively high mortgage rates and historically high housing prices.

First-time buyers now make up only 24% of all purchasers, down from 32% just two years ago.1 This shift underscores how affordability, credit access and limited inventory have reshaped entry into homeownership in the United States.

Homeownership Rates and Long-Term Growth

Despite affordability pressures, overall homeownership has grown steadily over the past decade. The national homeownership rate stands at 65.2% in 2025, compared to 63.5% in 2013.2 This increase represents nearly 12 million additional homeowners across the country.

Buyer Demographics going into 2025

Age and Income

  • Median buyer age: 56 years, an all-time high.1
  • First-time buyer age: 38 years, up three years from 2023.1
  • Median household income: $108,800, up from $107,000 the previous year.2

Household Composition1

  • Married couples: 62% of buyers.
  • Single female buyers: 20%, a modest increase.
  • Households with children under 18: Just 27%, the lowest share ever recorded.

Racial and Ethnic Breakdown1

  • White/Caucasian: 83%
  • Other ethnic groups: Showing gains but still underrepresented relative to population shares. However, 36% of first-time homebuyers are nonwhite.

Financing Trends: Cash Buyers on the Rise1

One of the most striking developments is the rise of cash transactions:

  • 26% of all buyers paid cash, the highest on record.
  • Median down payment: 18% overall, but only 9% for first-time buyers compared to 23% for repeat purchasers.

This growing reliance on cash could reflect both the competitive nature of the housing market and wealth inequalities across generations.

Multigenerational Homes and Evolving Living Arrangements

With affordability challenges and lifestyle shifts, 17% of buyers purchased multigenerational homes in 2024–2025, another record high.1 These arrangements might reflect both cultural preferences and practical considerations, such as combining resources to afford larger properties or caring for aging relatives.

Seller Demographics and Market Position1

  • Median seller age: 63 years, the oldest recorded to date.
  • Married couples: 69% of sellers.
  • Many sellers leveraged existing equity and rising property values to transition into downsizing, relocation, or cash-purchase opportunities.

Factors Driving Housing Market Inequality2

The report highlights possible systemic factors influencing ownership rates across demographics:

  • Demographics: Age distribution heavily impacts buyer profiles.
  • Affordability: First-time buyers often face the steepest entry barriers.
  • Credit access: Remains uneven, disproportionately affecting minority households.
  • Insurance costs: Rising premiums may be a critical affordability factor.

Affordable Loan Options for First-Time Homebuyers

  • USDA Loans

Loans purchased by the U.S. Department of Agriculture are ideal for buyers in rural or small-town areas. Qualified borrowers may be able to put zero money down and receive competitive interest rates. To qualify, the home must be located in a USDA-designated rural area, and the buyer’s income must fall below 115% of the local median. These loans require an Annual Guarantee Fee, which is .35% of the remaining loan balance paid monthly as a part of your mortgage payment. They also require an Upfront Guarantee Fee, which is 1% of the loan paid at closing or rolled into the loan.

  • FHA Loans

These loans are backed by the Federal Housing Administration and are designed to make homeownership more accessible for buyers with lower credit scores or limited savings. Offering a down payment as low as 3.5%, flexible debt-to-income ratios and the ability to use gift funds from family or friends, FHA loans are a popular choice for those who don’t qualify for conventional financing. FHA loans require an upfront mortgage insurance premium (UFMIP) or annual MIP. Upfront MIP is usually 1.75% of the loan amount, while the annual MIP is paid monthly as part of your mortgage payment.

For buyers interested in fixer-uppers, the FHA 203K loan allows renovation costs to be rolled into the mortgage, making it easier to purchase and improve older homes.

  • VA Loans

These loans are available to eligible Veterans, Active-Duty servicemembers and surviving spouses. These loans require no down payment and no mortgage insurance, making them one of the most cost-effective paths to homeownership. Applicants must meet specific service requirements and provide a Certificate of Eligibility (COE) to their lender in order to qualify. May include a VA funding fee.

  • Fannie Mae HomeReady®

HomeReady is a conventional loan program tailored for low- to moderate-income buyers. It allows for a down payment as low as 3% for qualified borrowers, which may come from gifts rather than the buyer’s own savings. At least one borrower must complete homebuyer education if all borrowers are first-time buyers. HomeReady® is a great fit for those who meet income limits and want a conventional loan with flexible terms and reduced upfront costs. Mortgage insurance may be required.

  • Freddie Mac Home Possible®

This is another conventional loan option offering a 3% down payment and flexible guidelines for income and property types. Like HomeReady®, it allows gift funds for the down payment and requires homebuyer education for first-time buyers. Home Possible®, like HomeReady®, is ideal for those who meet income limits and want a conventional loan with flexible terms and reduced upfront costs. Mortgage insurance may be required.

Conclusion

The 2025 housing market reflects a dynamic and evolving landscape—one shaped by demographic shifts, financial realities, and changing lifestyles. While affordability remains a challenge, the steady rise in homeownership and the growing diversity among first-time buyers signal resilience and adaptability. From multigenerational living to creative financing solutions, buyers are finding new ways to make homeownership a reality.

For those just beginning their journey, a wide range of loan programs offer accessible paths forward. Whether you're purchasing your first home at 38 or downsizing at 63, today’s market proves that homeownership is not a one-size-fits-all experience. It’s personal, evolving, and—most importantly—possible.

As trends continue to shift, staying informed and exploring the right resources can help every buyer find their place in the market.

 

 

Source:

1 https://www.nar.realtor/sites/default/files/2024-11/2024-profile-of-home-buyers-and-sellers-highlights-11-04-2024_2.pdf

2 https://www.nwrealtor.com/2025/05/01/nars-2025-home-buyers-and-sellers-generational-trends-report/

National Association of Realtors® is a registered trademark of the National Association of Realtors. Fannie Mae HomeReady® is a registered trademark of the Federal National Mortgage Association. Freddie Mac Home Possible® is a registered trademark of the Federal Home Loan Mortgage Corporation.