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The U.S. housing market is ‘starved’ for affordability: Boomers edge millennials and Gen Z out of homeownership in record numbers
It’s become increasingly difficult in recent years for young home buyers to break into the housing market. Between comparatively high mortgage rates and skyrocketing home prices, the weight of buying a home feels insurmountable for Gen Z and millennials.
And it shows in the data: In 2025, the share of first-time home buyers plummeted to a record low of 21%, while the typical age of first-time buyers climbed to an all-time high of 40 years, according to a National Association of Realtors report released Tuesday.
“The historically low share of first-time buyers underscores the real-world consequences of a housing market starved for affordable inventory,” Jessica Lautz, NAR deputy chief economist and vice president of research, said in a statement. “The share of first-time buyers in the market has contracted by 50% since 2007—right before the Great Recession.”
According to a previous NAR report, the share of “older” baby boomer (1946-1954) home buyers was 22%, while the share of “younger” millennials (1990-1998) and Gen Zers (1999-2011) were just 14% and 5%, respectively. And as Jim Reid, head of global macro research at Deutsche Bank pointed out in a note this summer, 46% of homes purchased in 2024 were by those aged 60 and over.
Younger buyers struggling to break into the housing market
Historically, younger buyers have made up a much larger piece of the pie. The median age of a first-time home buyer was 28 years old in 1991. That jumped to 38 years old in 2024, according to NAR. And “rising home prices and high mortgage rates have pushed” the median age of home buyers to a record-high of 56 years old in 2024, up from 46 in 2021,” wrote Apollo Academy Chief Economist Torsten Sløk, citing NAR data.
That’s not a great omen for the American dream, which has long been regarded as owning a home. It’s typically the largest asset a person will buy in their lifetime and home equity can serve as a nice nest egg for future home purchases or cashing out after a sale.
“Over the long run, property is an asset that ultimately gets redistributed from one generation to the next,” Reid wrote.
But many members of the younger generations don’t have that opportunity.
“Right now, that handoff is being stalled by high interest rates and elevated home prices,” Reid added. “At some point, either—or both—will have to adjust, or real wages for younger people will need to rise sharply.”
That’s another crux of the problem: Wages haven’t kept up with home prices. According to a 2024 report from the U.S. Department of the Treasury, rents and house prices have been rising faster than incomes across most regions of the U.S.
As of February, Americans need to make about $141,000 to afford a median-priced home, according to a National Association of Home Builders report, but the average salary for a person in the U.S. is about half of that.
The income needed to buy a home in the U.S. “remains significantly higher than before the [COVID-19] pandemic, underscoring the ongoing challenge of affordability even as market conditions gradually rebalance,” Realtor.com Chief Economist Danielle Hale said in a statement.
While housing market conditions are grim for Gen Z and millennials, they’ll eventually break into the housing market, Reid suggested.
“Eventually, the younger generation will own the homes currently held by the older generation,” he wrote. “We just don’t yet know what the price will be.”
A version of this story originally published on Fortune.com on July 23, 2025.
