Young homebuyers are facing even greater challenges in the housing market, as highlighted in a recent report by the National Association of Realtors. The report, released on Nov. 4, indicates that decreased housing affordability and limited inventory have further pushed potential first-time buyers away from the market. Between July 2024 and June 2025, the share of first-time homebuyers fell to a historic low of 21%, with the median age of these buyers rising to 40 from the late 20s during the 1980s.
According to the report, older repeat buyers, often with cash offers and substantial down payments, are dominating the market. This group now has a median age of 62, the highest ever recorded in the report’s 44-year history. Florida and Michigan are among the states attempting to aid first-time buyers through mortgage and down payment assistance programs. However, Michigan has already exhausted funds for its first-generation, first-time buyer initiative announced earlier this year.
In Utah, Governor Spencer Cox is advocating for significant zoning changes to facilitate the construction of 35,000 starter homes for first-time buyers. This plan includes overriding local regulations, although similar efforts have previously failed. “I don’t want my grandkids to be in Indiana,” Cox remarked, expressing concern over his son’s potential move due to housing costs.
Workplace proximity is becoming less of a priority for homebuyers, with only 31% considering it a key factor, down from 34% last year and 46% in 2019. The most cited reasons for home selection are neighborhood quality (59%) and proximity to friends and family (47%).
The federal government shutdown may also impact buyers, especially those in flood zones, since new government flood insurance contracts are currently suspended. This situation could leave buyers in high-risk areas like Florida and North Carolina unable to secure homes or exposed to risks, as noted by Realtor.com. Some may need to opt for more expensive private insurance options.
Homebuying costs remain near record highs, with median-priced home payments consuming nearly half of the median household income as of August, according to the Federal Reserve Bank of Atlanta. The affordability ratio was last below 30% in 2021. The Midwest is experiencing rapid price increases due to relative affordability, while the Northeast faces rising costs from a scarcity of homes. In contrast, Southern states have seen price declines attributed to new home construction.
Median home prices in the second quarter varied significantly, from $146,000 in Decatur, Illinois, to $2.1 million in Silicon Valley, California, as reported by the National Association of Realtors.
Efforts to assist homebuyers continue, with New York state launching a plan to build affordable homes on land owned by nonprofit land banks. California’s Dream For All program offers up to $150,000 for down payments, though it’s closed until 2026. Additionally, the Federal Home Loan Bank of Cincinnati expanded a program offering $25,000 for down payments in select regions.
