Here's the age when most Americans buy their first home
The typical first-time homebuyer is someone in their mid-30s who buys a property roughly 50 miles away from their previous home, according to a report from the National Association of Realtors.
The report, released this week, suggests that buying a first home comes a bit later in life for many Americans than it did before. The typical age of a first-time homebuyer is 36, up from 33 last year, NAR said. That marks the highest age point NAR has ever recorded, the organization said.
"First-time buyers are older as a result of saving for down payments for longer periods of time or relying on a generational transfer of wealth to propel them into homeownership," Jessica Lautz, NAR's vice president of demographics and behavioral insights, said in the report.
Home prices have skyrocketed
It's taking potential homebuyers longer to save for a down payment because home prices are much higher now than in previous years, Lautz said.
Home prices in Boise, Idaho; Denver, Colorado and San Jose, California skyrocketed earlier this year as demand there soared quickly. Those cities and some other metro areas are finally starting to see downturns, but home prices are still higher overall than they were a year ago.
First-time homebuyers are also traveling longer distances to score their new property, NAR found. Between 2018 and 2021, first-time homebuyers bought a property that was typically 15 miles away from their previous home. That distance has more than tripled this year to 50 miles, according to NAR.
While most people look for a home that's near family, but "for others, housing affordability was a driving factor to seek homes in areas farther away," Lautz said in the report.
The NAR report also noted that White Americans represent the vast majority (88%) of people who bought homes so far this year, up from 82% last year. Hispanic Americans make up 8% of all buyers so far. Asian and Black Americans have seen their percentage of all homebuyers fall from 6% last year to 2% and 3% respectively this year.
Stiff competition
No matter their race, homebuyers have spent this year wrestling with stiff competition, rising mortgage rates and higher prices — making it difficult for middle-class families to get a home. The average interest rate on a 30-year fixed rate mortgage hovered around 7% this week, more than double what it was at the beginning of 2022 and the highest rate in 20 years. Economists expect mortgage rates to continue growing next year, perhaps going as high as 8.5%.
The median U.S. home price is $384,800 compared to $379,450 a year ago, according to NAR. It was $310,800 in 2020.
Home prices have been climbing, in part, because inventory has remained stubbornly low. However, a separate NAR report from October found that the number of homes available for sale is starting to inch up in some areas.
Cities like Phoenix; Nashville, Tennessee, and Raleigh, North Carolina, have more inventory now compared to October 2021, NAR said. Austin, Texas; Memphis, Tennessee; and Riverside, California, have more homes for sale now compared to October 2020, the report showed.
