The average age for a first-time homebuyer is getting older. On average in the U.S. a first-time home buyer is 33 years old and the overall average age of homebuyers is 47. This data was first gathered in 1981 and current average ages are drastically higher.
Each succeeding generation is seeing a drop in homeownership. A current report found that between 1985-2020 homeownership rates broken down by generation are 77.8% for Baby Boomers, 69.1% for Generation X and 47.9% for Millennials. In terms of the real estate markets, the Millennials represent the major portion of homebuyers.
The change in the average age is due to several different factors. Home prices continue to rise due to lack of inventory and student debt is now also adding to the expenses. Mortgage rates are also shifting and are also adding to the problem especially along the coasts. Younger generations have gone to college and have college debt that is also making it difficult to save money for a down payment.
Since this is such a big generation, over the past five years we have seen a massive increase in the purchasing of homes. New first-time homebuyers in their 30s outweigh those in their 60s. In 1981 the typical homebuyer was at the average age of 31 according to the National Association of Realtors.
In terms of overall homebuyers 34% are first-time homebuyers. Younger Millennials made up 81% in the generational bracket, while 48% were older Millennials. Even though older Millennials made up less of the Millennial homebuyers, they were the biggest generation of first-time homebuyers.
The bad news is that Millennials are perceived to have less money than the preceding generations. Generation X came in on top with $125,000 as the median annual household income, where Millennials were only $110,300 per year. Millennials are perceived as the most educated group with 84% having earned a bachelor’s degree from a four year college even though they are not the highest paid generation.
Sixty percent of homebuyers were married couples, 19% were single females, 9% were males and 9% were unmarried couples. Baby Boomers were the highest group with 27% single female buyers. For unmarried couples, the Millennials had the highest at 21%. Thirty one percent of homebuyers had a child under 18 living at home.
If you are in the market to purchase a home, hire a real estate agent in your area. Many homebuyers today are purchasing for investment to earn a passive income. A Realtor can help you find the perfect home for investment due to the rise in rental income.