Many first-time homebuyers are pushing 40 as millennials wait in vain for a better market

While the opening months of this year showed early signs of a long-awaited thaw, the nation’s housing market remains far out of reach for many would-be buyers.

As Lee and Matozzo have found, steep prices and mortgage rates have been a yearslong reality for home hunters, and industry experts now fear the Trump administration’s escalating trade war threatens to derail recent progress on affordability. Census data shows it increasingly takes a six-figure income to become a homeowner.

The crisis is leading many Americans like Lee to wait longer to jump into the market.

The median age of first-time homebuyers hit 38 last year, up from 35 in 2023 and almost a decade older than in the 1980s, when the typical homebuyer was just 29, the National Association of Realtors reported late last year. Homeownership rates for Gen Z and millennials stalled in 2024, Redfin found, while older generations continued to make “fairly standard” gains despite the high costs. 

The jump in the average age of first-time buyers is shocking, said Dl Fairweather, chief at Redfin.

“We typically think of a first-time homebuyer as somebody in their early 30s, not late 30s,” she said.

One potentially less alarming explanation for the shift, she said, is that many younger buyers already purchased during the pandemic, when mortgage rates were much lower. And first-time buyers who could handle higher rates, “even if they were a bit late, would have bought in 2023,” she said.

Still, there’s no question that market conditions are keeping many young adults locked into properties they’ve outgrown, often as reluctant renters. Lee and Matozzo are more than ready to leave the two-bedroom townhome that they currently rent. They’d like to have a backyard for their chocolate Lab, Tank, and more space for another child.

Waiting for an affordable property that suits their needs has been dispiriting.

“They said, ‘Just give it a couple months, the market’s going to change,’” Matozzo recalled, “but it hasn’t changed for the better.” Homes in Luna’s school district remain in high demand, and bidding wars have been driving up prices.

Meanwhile, recent economic uncertainty — from shifting tariff policies and federal budget cuts to stock market volatility — has spooked homebuyers. Nearly 1 in 4 Americans were canceling plans to make a major purchase, such as a home or car, because of new trade policies, according to a Redfin survey released this week.

The Federal Reserve has signaled its resolve to hold off on further interest rate cuts until the inflation risks kicked up by the trade war grow clearer, ensuring that borrowing costs are set to stay high. Rates for popular 30-year fixed mortgages surged back above 7% this month, and many would-be buyers are recoiling despite a sizable recent jump in inventory. 

Last month, U.S. homeowners’ median monthly payments hit an all-time high of $2,800, according to Redfin. Roughly 70% of American households can’t afford a $400,000 home, the National Association of Home Builders found earlier this year. Yet the median sale price of houses sold in the fourth quarter last year was $420,000, census data shows.

Buying a first home later in life can have long-term financial impacts, said Fairweather, noting that 38-year-old buyers will still be paying off a 30-year mortgage well into retirement. “It could mean that people are less wealthy as retirees,” she said, because home equity is a significant source of retirement savings for many households.

For those who cannot purchase a home at the moment, Fairweather recommends prioritizing contributions into a tax-advantaged retirement savings account, like an IRA or 401(k).

“Treat it the way you would treat your rent,” she said, ideally by making monthly payments such as 10% of your rent amount. The goal is to “create systems so that you are automatically saving the way a homeowner would.” 

She also said buyers in a strong financial position shouldn’t try to time the market. “If you can afford it, there’s no reason to wait,” she said. If rates improve, it’s always possible to refinance.

Based on current trends, Fairweather warned, “it’s likely going to be just as difficult to buy next year as it is this year.”