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The first-time homebuyer in 2023 looks a little different than they did when baby boomers were buying their starter homes. Thanks to higher home prices and middling inventory, new owners tend to be older, earn more, and are likelier to be single or childless than in the past. That’s according to the 2023 Profile of Home Buyers and Sellers, published by the National Association of Realtors® (NAR) on Monday. NAR has put the report out annually since 1981; this year, it is based on responses from nearly 7,000 buyers who purchased a primary residence between July 2022 and June 2023. It finds that the typical first-time buyer was 35 years old this year. That’s the second-oldest age in four decades of NAR’s data—second only to last year’s 36—and higher than when many baby boomers bought their first homes. Reflecting the increasing unaffordability of the housing market, they also earn more than first-time buyers of the past, reporting a median income of $95,900—up from $71,000 last year—and their typical down payment was 8%, the highest since 1997, when it was 9%. They are also more likely to be single, much less likely to have children, and significantly more diverse. In fact, NAR’s report finds just 52% of first-time buyers were married, compared to 63% of repeat buyers, and 36% have a child under the age of 18 living at home, down from 44% last year. There are also more of them than there were last year. After falling to a record-low 26% of buyers in 2022, first-timers made a comeback this year, comprising 32% of sales. While a promising trend for the potential first-time buyers sitting on the sideline, that’s still well below the 38% average seen since 1981, and the fourth lowest share in that timeframe. The report highlights how millennials are still fighting to break into the housing market—no matter how much it costs or how long it takes, the report shows, whether that means cutting spending on luxury goods and entertainment or even pulling money from a 401(k), stocks, and cryptocurrency. In fact, nearly a quarter of first-time homebuyers relied on these types of assets to buy a house, and another 23% used a gift or loan from friends or family for the down payment.
