First-Time Buyer Share Falls to Record Low, NAR Reports

First-time buyers accounted for just 24% of U.S. home purchases in 2025, a record low since NAR began tracking the metric in 1981. The National Association of Realtors released the figure in its annual Profile of Home Buyers and Sellers report published this week. The historical average is 38%.

The median age of first-time buyers climbed to 38, also a record, from 35 two years earlier. Median income for first-time buyers reached $97,000, compared with $114,000 for repeat buyers. Dollar down payment averaged $24,500 at median, with 71% of first-time buyers citing saving for a down payment as the single hardest part of the purchase process.

"The path to a first home has lengthened in every measurable way over the past five years," said Jessica Lautz, deputy chief economist and vice president of research at NAR. Lautz said extended renting periods, graduate-school-era debt balances, and home prices outpacing wage growth all contributed to the shift.

Family assistance played a larger role than in any prior survey. Among first-time buyers, 27% reported receiving a gift or loan from family or friends for the down payment, up from 23% a year earlier. Lautz said intergenerational wealth transfer has become a "meaningful differentiator" between buyers who were able to transact in 2025 and those who remained on the sidelines.

Property-type preferences among first-time buyers diverged from the historical pattern. Townhomes and condos together accounted for 18% of first-time purchases, up from 12% in 2020. Single-family detached homes fell to 75% from 81%. The share of first-time buyers who purchased in a walkable urban neighborhood, per NAR's definition, rose to 22% from 16%.

Affordability remains the primary barrier. Danielle Hale, chief economist at Realtor.com, estimated that a typical first-time buyer would need to allocate 40% of gross monthly income to housing to buy at the current median price and rate. That compares with roughly 30% in 2019. The figure is above the 28% front-end ratio that mortgage underwriters traditionally target.

Some positive signals have emerged. First-time purchase loan volume in Q1 2026 rose 9% year-over-year per Optimal Blue data, reflecting the small inventory improvement and stabilization of mortgage rates. Downpayment assistance program enrollment reached a record in 2025, per HUD Secretary Adrianne Todman's testimony before the Senate Banking Committee, with 212,000 households using the programs.

"I am cautiously optimistic that we have seen the trough for first-time buyers," said Lautz. NAR projects the first-time buyer share will recover to 28% by end of 2027 if mortgage rates decline to the 6.0 to 6.25% range and inventory continues to build.