Diverse Age Groups Impacting Direction of Real Estate Market Between Elderly and Youth
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In the ever-evolving landscape of the American housing market, a new trend has emerged: the median age of first-time home buyers has reached an all-time high of 38 years old in 2024[1][2][3][4][5]. This significant shift reflects the challenges younger buyers face in entering the market.
A Generational Divide in Homeownership
The housing market is increasingly dominated by older generations, particularly baby boomers and seniors aged 60 and over, who accounted for 46% of home purchases in 2024, with baby boomers alone making up 22% of all buyers[2][4]. In contrast, millennials and Gen Z are buying homes at much lower rates. First-time buyers make up only 24% of buyers, a record low, and younger millennials (born 1990-1998) represent about 14%, while Gen Zers (1999-2011) only about 3-5% of total homebuyers in 2024[2][3][4][5].
Economic Challenges Facing Millennials and Gen Z
The rise in home prices and record-high mortgage rates, averaging around 6.7% for 30-year fixed loans in mid-2025, are key factors delaying homeownership for millennials and Gen Z[4][5]. Additionally, increased financial burdens such as student loan debt and inflation, as well as social spending habits impacting savings, are contributing to the delay[4][5]. Historically, the median age of first-time buyers was about 28 years in 1991, so the shift to 38 years means people are buying homes much later in life, postponing this milestone significantly[2].
Optimism and Priorities Among Younger Generations
Despite the challenges, millennials and Gen Z show resilience and optimism about owning a home. For instance, Matthew M. Williams, at 25 years old, recently purchased his first house in the St. Louis area[1]. Furthermore, millennials are more optimistic about owning a home than older adults, with 60% of millennials saying they're optimistic compared to just 38% of older adults[1].
For millennials and Gen Z, the view of homeownership is utilitarian, prioritizing flexibility, access to amenities, and an enjoyable living space[1]. This contrasts with baby boomers, who view homeownership as an asset they can purchase early, pay off, and utilize for equity when they retire[1].
Affordability and the Affordable Housing Crisis
A plurality of potential homebuyers prioritise affordability, and a majority say the U.S. is facing an affordable housing crisis[1]. House-hunting TV shows portray affordable, updated, move-in-ready homes for any budget, but this is rarely the case in reality[1]. Approximately 87% of millennials think government policies should do more to make homeownership accessible, compared to 75% of boomers and 78% of Gen Xers[1].
Paying the Price for Homeownership
To afford the median home sale price with a 20% down payment and a 6.89% interest rate, a buyer would need to make over $100,000 annually[1]. This financial barrier, coupled with student loan debt, which is an obstacle holding younger generations back from homeownership that their older peers didn't have, further complicates the situation[1].
In summary, first-time homebuyers are now typically in their late 30s, a full decade older than a few decades ago, with millennials and Gen Z finding it difficult to buy homes due to economic and market challenges. Meanwhile, older generations, especially baby boomers, are the main drivers of home purchases in 2024 and 2025[1][2][3][4][5].
[1] Clever Offers (2025). The Realities of Homeownership for Millennials and Gen Z. [Online] Available: https://www.cleveroffers.com/research/millennial-homeownership-report
[2] National Association of Realtors (2025). 2024 Profile of Home Buyers and Sellers. [Online] Available: https://www.nar.realtor/research-and-statistics/profile-of-home-buyers-and-sellers
[3] National Association of Home Builders (2025). Home Buyer Generational Trends Report. [Online] Available: https://www.nahb.org/research/housing-market-trends/home-buyer-generational-trends-report
[4] Federal Reserve Bank of St. Louis (2025). Millennial Homeownership Rates. [Online] Available: https://fred.stlouisfed.org/series/MMHGQ156S
[5] Pew Research Center (2025). Homeownership Rates by Age Group. [Online] Available: https://www.pewresearch.org/fact-tank/2025/03/17/homeownership-rates-by-age-group/
[6] Urban Institute (2025). The State of the Nation's Housing 2025. [Online] Available: https://www.urban.org/urban-wire/state-nations-housing-2025
- Given the rise in home prices and mortgage rates, some individuals might consider investing in home-and-garden education and self-development to increase their knowledge of the real-estate market, potentially allowing them to make more informed decisions about housing.
- As baby boomers and seniors continue to dominate the housing market, younger generations may find it beneficial to focus on career development and personal finance, as they work towards saving for their first home.
- In the midst of the affordable housing crisis, some individuals might explore decorating their current homes to make them more appealing and enjoyable, rather than concentrating solely on upgrading to a larger or newer home.
- Because the median age of first-time home buyers is now 38, several young adults might consider purchasing homes earlier in their lives as a means of increasing long-term investment and financial security, similar to the strategy employed by baby boomers.
- With millennials and Gen Z buyers prioritizing access to amenities and an enjoyable living space, real-estate agents may find it worthwhile to spend more time focusing on lifestyle-oriented listings that cater to these preferences.
