Market Deep Dive: What Happened to the First-Time Home Buyer?

If buying your first home feels impossible, you’re not imagining it. The data from 1981 through 2025 tells a blunt story—and it’s not just “rates are high.” It’s demographics, down payments, prices vs. incomes, and inventory all moving the wrong way at once.

What the numbers say

• First-time buyer share: Fell to 21% in 2025, the lowest since tracking began in 1981. Before 2008, it was often around 40%. National Association of REALTORS®+1

• Age of the first-time buyer: Up to a record 40 in 2025 (vs. late-20s/early-30s in the 1980s). That’s a decade of delayed wealth-building. National Association of REALTORS®+1

• Down payments: Typical first-timer now puts ~10% down, tied for the highest since 1989; Q4 2024 median down payment dollars hit a record. National Association of REALTORS®+1

• Prices vs. incomes: National median price-to-income ratio ~5.0 in 2025 (≈3.5 in the mid-1980s). Homes cost more relative to paychecks. Visual Capitalist+1

• Mortgage rates, context: 30-yr fixed peaked near 18% in 1981, hit ~3% in 2021, and sit around ~6.2% today (Nov 2025)—better than 2023–24 highs, but payments are still elevated with today’s prices. Longterm Trends+2Rocket Mortgage+2

What it means (no fluff)

• The bottleneck isn’t only rates. It’s price levels, bigger down payments, and older repeat buyers staying put longer, which chokes inventory and sidelines newcomers. National Association of REALTORS®

• Waiting has a cost: entering at 40 vs. 30 likely means fewer total moves and less time compounding equity.