First-Time Homebuyers Face an Affordability Crisis But Some Are Finding a Way In

While first-time homebuyers have largely been priced out of the housing market this year, a fraction of them are still finding success—thanks in part to family help and opting for more affordable locations.

A November report from the National Association of Realtors (NAR) paints a relatively bleak picture of the housing market for young people: The median age for first-time homebuyers is 40, an all-time high since the NAR started tracking data in 1981.

Additionally, the homeownership rate of those under age 35 was just 37.5% in the third quarter of 2025, according to Census Bureau data. That’s higher than earlier this year but down from more than 40% during the COVID-19 pandemic.

“For generations, access to homeownership has been the primary way Americans build wealth and the cornerstone of the American Dream,” said Shannon McGahn, an executive vice president at NAR. “Delayed or denied homeownership until age 40 instead of 30 can mean losing roughly $150,000 in equity on a typical starter home.”

While mortgage rates have declined and housing stock has increased over the past year, homeownership remains prohibitively expensive for many because of persistently low supply, especially in certain regions. As of October, the median home price for an existing home was $415,200.

To afford a down payment, most first-time buyers report relying primarily on their savings, but more than one in five (22%) said the top source of money for their down payment came from gifts or loans provided by family or friends, according to NAR.

Gen Z, in particular, comprises a significant portion of first-time home buyers in low-cost markets.

A report from the Intercontinental Exchange found that, in the first quarter of 2025, Gen Z buyers were responsible for more than 30% of first-time homebuyer loan activity in Indiana, Kentucky, and South Dakota—but they make up only a small fraction of first-time homebuyers in high-cost regions such as Washington, D.C., and California.

As for the young homebuyers who remain on the sidelines, many report that they’re paying off debt and investing to save for a home.

“Buyers are navigating a complex environment with rising costs, fluctuating rates, and mixed signals, but many are still planning ahead,” said Matt Vernon, head of consumer lending at Bank of America. “They’re building credit, saving for down payments, and paying attention to the market so they can buy when the time is right for them.”