The Median First-Time Homebuyer Age Just Reached an All-Time High: 5 Impacts on the Housing Market
Written by
Brooke Barley
Edited by
Jenna Klaverweiden
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According to the National Association of Realtors, the typical age of first-time buyers has reached a historic high of 40 years old.
With the population of homebuyers getting older, what does this mean for the real estate market, or younger buyers who want to purchase property? GOBankingRates talked to real estate experts to get their takes.
1. Buyers Might Be Less Likely To Purchase a Second Home
According to Buffie Patterson, president of Columbus Realtors, if the average buyer is in their 40s, it’s much less likely than previous years that they’ll buy a second home.
“When you buy your first home at age 40, it becomes harder to build wealth through your home’s equity. Without equity, homeowners are less likely to move into a second or third home as they age,” she said.
2. Demand Could Increase for Single-Story Homes
Since buyers are less likely to buy another home in their lifetime, they’re probably looking for a home they can stay in forever. This means looking for a home that checks most of the boxes and thinking ahead to retirement where stairs might pose an issue.
“The elderly do not desire speedy turnover but stability and a feeling of belonging,” said Nathan Polatis, the owner of House Buyer Salt Lake City. “It would imply that the demand of single-family houses in the developed neighborhoods is higher, and it may raise the prices in the developed areas.”
3. Homes Likely May Need To Be Move-In Ready
Since buyers will likely be staying in one place, they may want homes that can support their needs immediately.
“This age group tends to have a home that they can walk into and live in immediately, and thus they are not so much interested in fixer-uppers,” explained Aaron Perez, CEO of Sell Your San Antonio House. “Such a preference will probably drive the price of houses that require minimal or no repairs.”
4. Fixer-Uppers May Not Sell
Because the demand for move-in ready homes may increase, those trying to put their less-than-perfect home on the market might not see any appealing offers.
“‘Perfect’ homes will see bidding wars, while any home with deferred maintenance or an outdated kitchen will sit on the market and will continue to be seen as ‘toxic’ by buyers,” said Ryan Smith, the founder of Cinch Home Buyers.
5. Home Prices Could Stay High
Unfortunately for younger buyers, experts say this trend could be bad news for those looking to buy property without having a lot of cash on hand.
“The long-term effect is slower movement in the market,” said Zach Fertig, co-owner of Property Leads, said. “Fewer first-time buyers get in. Older owners and investors drive most of the activity. Prices stay high because the people with money and equity keep buying. Younger buyers keep renting because the entry cost is too high.”
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