First-time buyers fall to 40-year low as affordability challenges grow
The latest 2025 Profile of Home Buyers and Sellers from the National Association of REALTORS® (NAR) confirms a continued shift in buyer demographics and market activity. First-time homebuyers represented just 21% of all home purchases between July 2024 and June 2025—the lowest share in the survey’s 44-year history.
This decline reflects the ongoing affordability pressures facing prospective buyers nationwide.
Changing demographics and shifting motivations
The 2025 report also highlights shifts in buyer composition. Married couples accounted for 61% of all homebuyers, while single women accounted for 21% and single men for 9%. Among first-time buyers, single women represented 25%, continuing their long-term trend as a growing share of the market.
The share of buyers with children under 18 declined to 24%, which NAR links to demographic changes, including lower birth rates and an increasing proportion of older repeat buyers. Childcare costs also remain a noted barrier to saving for a down payment.
Regarding location preferences, neighborhood quality (59%) and proximity to friends and family (47%) were the most common factors influencing purchase decisions. The share of buyers prioritizing commute convenience continued to decline, reaching 31%, down from more than 50% a decade ago. The shift reflects ongoing workplace flexibility and hybrid work trends.
Repeat buyers hold a strong advantage
Non-first-time buyers, or repeat buyers, continued to benefit from accumulating housing equity and higher household incomes. The median age of repeat buyers increased to 62, and nearly 30% of these buyers purchased their homes with cash, minimizing the impact of high mortgage rates. The median down payment for repeat buyers reached 23%, compared to 10% for first-time buyers—the highest level for new buyers since 1989.
“The data underscores a widening affordability divide in the market,” says Jessica Lautz, NAR’s deputy chief economist and vice president of research. “While first-time buyers face the highest barriers in decades, repeat buyers are capitalizing on record housing equity and strong cash positions.”
Homeowners also continued to stay in their homes longer. The median tenure rose to 11 years, another record, influenced in part by low existing mortgage rates that have discouraged owners from listing—a trend commonly described as the “golden handcuff” effect.
Affordability barriers continue to sideline first-time buyers
NAR attributes the continued decline in first-time buyer activity to elevated mortgage rates, limited inventory, and high home prices. During the reporting period, the average 30-year mortgage rate was 6.69%, and many entry-level listings remained out of reach for typical buyers entering the market.
Those who did purchase were older and more financially established than the historical norm. The median age of first-time buyers rose to 40, the highest ever recorded by the survey. Down payment strategies also shifted, with 59% relying on personal savings and 26% using financial assets, suggesting that a majority of potential buyers needed substantial resources to compete in the market.
