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Property First-Time Homebuyer Statistics
Buying a first home is typically the largest financial decision and commitment most people will ever make. We wanted to find out just how big this impact was on the nation, and what the first-time buyer market looks like. To do this, we have reviewed the most significant reports, research papers, and analysis to provide a comprehensive overview of first-time homebuyer statistics.
Key first-time homebuyer statistics:
- The average first-time homebuyer is 35 years old as of 2023, down from 36 years old in 2022.
- First-time buyers have a median household income of $95,900, compared to $111,700 for repeat buyers.
- In 2020, there were an estimated 1,782,500 first-time homebuyers, 2.7% less than 2019’s figure of 1,734,150.
- The average first-time homebuyer down payment across all states is $8,220, which is 6% of the average first-time home price of $137,008.
- The average credit score for a first-time homebuyer is 746, repeat buyers have an average score of 754.
What is a first-time homebuyer?
It may seem obvious to assume that a first-time buyer is someone who has never purchased property before. However, the definition can extend slightly beyond this. For example, the U.S. Department of Housing and Urban Development (HUD) [1] U.S Department of Housing and Urban Development (HUD): First time buyer definitions - Accessed September 2021 https://archives.hud.gov/offices/hsg/sfh/ref/sfhp3-02.cfm defines some exceptions for first-time buyers such as:
- Someone who has never owned a ‘principal residence’, even if their spouse has previously owned property
- A person who is now displaced where their previous property ownership was with their spouse
- A single parent who previously owned a home with their spouse (or ex-spouse)
- Someone who hasn’t owned a ‘principal residence’ for the last three years (ending on data of new home purchase)
Therefore, a first-time homebuyer is not just someone about to buy their first home. This distinction is important as these exceptions will feed into the statistics.
However, mortgage lenders and first-time buyer assistance programs may have their own definitions and distinctions, so it is important to do the research to find the program that best suits the individual’s needs.
First-time homebuyer demographics
According to the NATIONAL ASSOCIATION OF REALTORS® (NAR) survey of homebuyers that was completed for the year ending July 2023, first-time buyers made up 32% of all homebuyers, an increase from 26% in 2022, but is still below the 38% average not seen since 1981. [2] National Association of Realtors - Profile of Home Buyers and Sellers - Accessed March 2024 https://cdn.nar.realtor/sites/default/files/documents/2023-profile-of-home-buyers-and-sellers-highlights-11-13-2023.pdf?_gl=1*v2s3nh*_gcl_au*MTAwNzgwNzkxMS4xNzA0ODkwMTY1 But what is the exact makeup of the typical first-time homebuyer? The following is a breakdown of the average demographics for first-time homebuyers in the U.S.
How old are first-time homebuyers?
The average age of all first-time homebuyers across all ages and ethnicities is 35 years old as of 2023, this is slightly down from 36 years old in 2022. [2] National Association of Realtors - Profile of Home Buyers and Sellers - Accessed March 2024 https://cdn.nar.realtor/sites/default/files/documents/2023-profile-of-home-buyers-and-sellers-highlights-11-13-2023.pdf?_gl=1*v2s3nh*_gcl_au*MTAwNzgwNzkxMS4xNzA0ODkwMTY1
First-time buyers by age group
| Age | Percentage of first-time home buyers |
|---|---|
| 24-32 | 70% |
| 33-42 | 46% |
| 43-57 | 21% |
| 58-67 | 9% |
| 68-76 | 7% |
| All buyers | 26% |
Source [3] NAR, ‘2023 Home Buyers and Sellers Generational Trends Report - Accessed March 2024 https://www.nar.realtor/sites/default/files/documents/2023-home-buyers-and-sellers-generational-trends-report-03-28-2023.pdf
2023 data shows that when looking at homebuyers per age group, more 24-32-year-olds are first-time homebuyers than any other age range. This data shows that 70% of homebuyers aged 24-32 were first-time buyers. This contrasts with 46% of buyers aged 33-42, and 21% of those aged 43-57.
Age of first-time homebuyers over time
The average age of first-time buyers has increased from 29 in 1981 to 35 in 2023. [2] National Association of Realtors - Profile of Home Buyers and Sellers - Accessed March 2024 https://cdn.nar.realtor/sites/default/files/documents/2023-profile-of-home-buyers-and-sellers-highlights-11-13-2023.pdf?_gl=1*v2s3nh*_gcl_au*MTAwNzgwNzkxMS4xNzA0ODkwMTY1 The lowest average age of first-time homebuyers in the last 40 years was in 1991 when it dipped to 28 and it has not been this low since. The below graph shows the average age of first-time homebuyers since 1981, some years are missing as the data was not collected every single year.
| Year | Average Age of First-time Homebuyers |
|---|---|
| 1981 | 29 |
| 1985 | 29 |
| 1987 | 29 |
| 1989 | 30 |
| 1991 | 28 |
| 1993 | 32 |
| 1995 | 31 |
| 1997 | 32 |
| 2000 | 32 |
| 2002 | 31 |
| 2003 | 32 |
| 2004 | 32 |
| 2005 | 32 |
| 2006 | 32 |
| 2007 | 31 |
| 2008 | 30 |
| 2009 | 30 |
| 2010 | 30 |
| 2011 | 31 |
| 2012 | 31 |
| 2013 | 31 |
| 2014 | 31 |
| 2015 | 31 |
| 2016 | 32 |
| 2017 | 32 |
| 2018 | 32 |
| 2019 | 33 |
| 2020 | 33 |
| 2022 | 36 |
| 2023 | 35 |
Race/ethnicity of first-time homebuyers
According to a NAR survey, most first-time homebuyers are white (81%), followed by Hispanic buyers and Black/African American buyers (both 7%). Those identifying as Asian or Pacific Islander make up 6% of first-time homebuyers, while the remaining 6% identified as another race. [2] National Association of Realtors - Profile of Home Buyers and Sellers - Accessed March 2024 https://cdn.nar.realtor/sites/default/files/documents/2023-profile-of-home-buyers-and-sellers-highlights-11-13-2023.pdf?_gl=1*v2s3nh*_gcl_au*MTAwNzgwNzkxMS4xNzA0ODkwMTY1
| Ethnicity | Percentage of first-time homebuyers |
|---|---|
| White | 81% |
| Hispanic | 7% |
| Black/African American | 7% |
| Asian/Pacific Islander | 6% |
| Other | 6% |
To put these figures into some historical context, the same analysis highlights the change from 1997 when first-time homebuyers looked like this:
| Ethnicity | Percentage of first-time homebuyers |
|---|---|
| White | 71% |
| Hispanic | 10% |
| Asian, Multiracial, Other | 5% |
| Black/African American | 14% |
In relation to the overall homeownership market, historically homeowners have been mostly white [4] Federal Reserve Bank of New York, ‘Inequality in U.S. Homeownership Rates by Race and Ethnicity’ - Accessed September 2021 https://libertystreeteconomics.newyorkfed.org/2020/07/inequality-in-us-homeownership-rates-by-race-and-ethnicity/. For example, the overall homeownership rate for white households in 2019 was 73.1%, but 46.6% for Hispanic households, and 40.6% for Black households. It should be noted that in this particular dataset, race and ethnicity are defined by the head of the household.
The homeownership rate percentage analyzes the number of American homes that are occupied by the owner divided by the total number of all occupied households.
Marital status of first-time homebuyers
As of 2022, most first-time home buyers (50%) are married couples, however this figure is 25 percentage points lower than the 75% of first-time buyers who were married couples in 1985. In 2022, single women came in second at 19%, followed by unmarried couples at 18%. Single men make up the smallest proportion of first-time buyers at 10%. [5] NAR, ‘Love (and Home Buying) Brings Us Together’ - Accessed March 2024 https://www.nar.realtor/blogs/economists-outlook/love-and-home-buying-brings-us-together-married-vs-unmarried-couples-in-the-housing-market
| Marital status | Percentage of first-time buyers |
| Married couples | 50% |
| Single women | 19% |
| Single men | 10% |
| Unmarried couples | 18% |
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Download our guideAverage income of first-time homebuyers
The average median household income of first-time homebuyers is $95,900, while the average income of repeat buyers is $111,700. This will typically be related to the difference in age as the average first-time buyer is 35 years old and the average repeat buyer is 58 years old. The average income of first-time buyers also varies by state. [6] NAR, ‘Quick Real Estate Statistics’ - Accessed March 2024 https://www.nar.realtor/research-and-statistics/quick-real-estate-statistics
Average cost of a first home in the U.S.
As of June 2023, the median price for a starter home was $243,000, with California having the highest-priced starter homes including $925,000 in San Jose and $680,000 in Anaheim. Starter homes in the Rust Belt have the lowest average prices, starting at $60,000 in Detroit, according to Redfin. [7] Redfin, ‘First Time Buyers Need to Earn 13% More Than a Year Ago to Afford the Typical U.S. Starter Home’ - Accessed March 2024 https://www.redfin.com/news/starter-homes-price-income-needed-increase/
By comparison, the median sale price of all homes in the U.S. at that time was $426,056. [8] Redfin, ‘Homes Are Selling for Near Record Highs as Supply Falls to New Low, Demand Picks Up - Accessed March 2024 https://www.redfin.com/news/housing-market-tracker-june-2023/
As of 2022, first-time buyers paid an average of 7% for a down payment, while repeat buyers put down 17% on average. [9] NAR, ‘Tackling Home Financing and Down Payment Misconceptions’ - Accessed March 2024 https://www.nar.realtor/blogs/economists-outlook/tackling-home-financing-and-down-payment-misconceptions
| Median home cost in the U.S. | |
|---|---|
| Starter Homes | $243,000 |
| All Homes | $426,056 |
The data below shows how the pandemic has affected home prices for first-time buyers.
Average credit scores for first-time homebuyers
According to an analysis on behalf of Self on lifetime interest payments, the average home buyer with a FICO credit score of ‘Excellent’ (760-850) rather than ‘Good’ (680-699) would save over $30,000 in interest fees across one typical 30-year mortgage.
Average size of first-time homebuyers house
The average size of a starter home in the U.S. as of August 2023 is 1,250 square feet. [10] Five Star Painting, ‘Here’s What Starter Homes Look Like in Cities Around the U.S.’ https://www.fivestarpainting.com/starter-homes-by-city/ Below you can see how the average first-time home compares with the average house size for other buyers, which sits at approximately 2,299 square feet as of 2022. [11] Statista, ‘Median size of single family housing unit in the United States from 2000 to 2019’ - Accessed September 2021 http://statista.com/statistics/456925/median-size-of-single-family-home-usa/
Number of first-time homebuyers over time
Combining various datasets, we have plotted estimates of the proportion of first-time homebuyers over time and how many there were in each year since 2000. In 2020, there were an estimated 1,782,500 first-time home buyers.
| Year | Estimated Number of FTBs |
|---|---|
| 2000 | 2,177,700 |
| 2001 | 2,268,000 |
| 2002 | 2,683,860 |
| 2003 | 2,496,000 |
| 2004 | 2,760,000 |
| 2005 | 2,840,000 |
| 2006 | 2,340,000 |
| 2007 | 1,977,300 |
| 2008 | 1,648,200 |
| 2009 | 2,162,000 |
| 2010 | 1,918,200 |
| 2011 | 1,565,100 |
| 2012 | 1,838,850 |
| 2013 | 1,941,800 |
| 2014 | 1,610,400 |
| 2015 | 1,659,200 |
| 2016 | 1,890,000 |
| 2017 | 1,597,900 |
| 2018 | 1,780,350 |
| 2019 | 1,734,150 |
| 2020 | 1,782,500 |
Since 2000, the proportion of home buyers who are purchasing their first home has been an average of 38%. This was at its highest in 2009 when 47% of home buyers were purchasing for the first time. 2017 figures show the lowest proportion of first-time buyers in the market at 29%, however, the year also saw the highest number of overall home buyers (5,510,000) since 2006 (6,500,000).
Interestingly, with the 2020 global pandemic severely affecting the economy and consequent housing market, the proportion of first-time homebuyers was 31%, only two percentage points lower than the previous two years.
Sources
- [1] U.S Department of Housing and Urban Development (HUD): First time buyer definitions - Accessed September 2021 https://archives.hud.gov/offices/hsg/sfh/ref/sfhp3-02.cfm
- [2] National Association of Realtors - Profile of Home Buyers and Sellers - Accessed March 2024 https://cdn.nar.realtor/sites/default/files/documents/2023-profile-of-home-buyers-and-sellers-highlights-11-13-2023.pdf?_gl=1*v2s3nh*_gcl_au*MTAwNzgwNzkxMS4xNzA0ODkwMTY1
- [3] NAR, ‘2023 Home Buyers and Sellers Generational Trends Report - Accessed March 2024 https://www.nar.realtor/sites/default/files/documents/2023-home-buyers-and-sellers-generational-trends-report-03-28-2023.pdf
- [4] Federal Reserve Bank of New York, ‘Inequality in U.S. Homeownership Rates by Race and Ethnicity’ - Accessed September 2021 https://libertystreeteconomics.newyorkfed.org/2020/07/inequality-in-us-homeownership-rates-by-race-and-ethnicity/
- [5] NAR, ‘Love (and Home Buying) Brings Us Together’ - Accessed March 2024 https://www.nar.realtor/blogs/economists-outlook/love-and-home-buying-brings-us-together-married-vs-unmarried-couples-in-the-housing-market
- [6] NAR, ‘Quick Real Estate Statistics’ - Accessed March 2024 https://www.nar.realtor/research-and-statistics/quick-real-estate-statistics
- [7] Redfin, ‘First Time Buyers Need to Earn 13% More Than a Year Ago to Afford the Typical U.S. Starter Home’ - Accessed March 2024 https://www.redfin.com/news/starter-homes-price-income-needed-increase/
- [8] Redfin, ‘Homes Are Selling for Near Record Highs as Supply Falls to New Low, Demand Picks Up - Accessed March 2024 https://www.redfin.com/news/housing-market-tracker-june-2023/
- [9] NAR, ‘Tackling Home Financing and Down Payment Misconceptions’ - Accessed March 2024 https://www.nar.realtor/blogs/economists-outlook/tackling-home-financing-and-down-payment-misconceptions
- [10] Five Star Painting, ‘Here’s What Starter Homes Look Like in Cities Around the U.S.’ https://www.fivestarpainting.com/starter-homes-by-city/
- [11] Statista, ‘Median size of single family housing unit in the United States from 2000 to 2019’ - Accessed September 2021 http://statista.com/statistics/456925/median-size-of-single-family-home-usa/
