With rising interest rates now averaging more than 7% and limited inventory, the market is especially tough for first-time home buyers on a limited budget.
The age when someone buys their first home in America is skewing older. In 2022, the typical age of the first-time homebuyer was 36, which is an all-time high, according to the National Association of Realtors. Just a year earlier, the typical age was 33.
In 2022, only 26% of homebuyers were first-time compared to 50% of all homebuyers in 2010.
Housing affordability and inventory challenges significantly impacted when, where and how consumers purchased homes, according to the National Association of Realtors.
First-time buyers are older as a result of saving for down payments for longer periods of time or relying on a generational transfer of wealth, the report said.
For younger many first-time buyers, sacrifices have to be made to buy a house.
Lindsay and Michael Hyland started their house hunt last year in St. Petersburg, Florida, and moved to northern New Jersey.
They lived with Michael's parents in New Jersey to save for a down payment. They were outbid in Florida as people were paying with cash offers.
"People were bidding $60,000 to $70,000 over asking," said Lindsay Hyland. "We can't afford that."
With the rising interest rates, the Hylands opted to buy a townhouse to stay within their budget of around $500,000, instead of a single-family home. A two-bedroom is tight for a growing family with a baby on the way. But they would rather live within their budget than buy something they cannot afford.
Mary Chao
