Here’s the Age of the Average First-Time Homebuyer and Why It’s Not Too Late If You Are Older
Perhaps owning a home is your dream and you’re starting to feel discouraged. The real estate frenzy over the past few years has made the process feel exhaustingly competitive.
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The good news is you’re not alone. First-time buyers made up just 26% of all buyers in 2022, down from 34% in 2021, according to the National Association of Realtors. This number had peaked at 50% in 2010, during the First-Time Home Buyer Tax Credit.
Additionally, the average first-time buyer in 2022 was 36 years old, according to NAR. This marks an increase from 33 in 2021.
But it’s not too late even if you are beyond your mid-30s.
The Best Places for First-Time Homebuyers
As for where Americans are buying homes, Dennis Shirshikov, head of growth at Awning.com, said it varies greatly according to population density, job opportunities and other factors.
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“Generally, urban areas tend to have higher home prices and a higher median age for first-time homebuyers, while rural areas have lower prices and a lower median age for first-time homebuyers,” he said. “However, this is not always the case, and it’s important to look at local market trends and your personal financial situation when making a decision on where to buy a home.”
It’s possible you’re set on staying in your local area; but, if not, Zillow created a list of the 10 best metro areas for first-time homebuyers in 2023. Here are the cities the company selected, in order of ranking.
Syracuse, New York
Little Rock, Arkansas
What To Do If You Feel Like You’re Behind
If you feel like you’re buying a home a little late in life, Shirshikov said it’s important to understand that homeownership is not a one-size-fits-all initiative and there are many different paths to achieving it.
“Whether it’s through renting to own, government-assisted programs or alternative forms of financing, there are many options available to help make homeownership a reality,” he said. “It’s important to do your research and consult with a financial advisor to determine the best course of action for your individual situation.”
While the average American is buying their first home in their 30s, this number can vary depending on location, income, credit score and other factors.
“If you feel like you’re behind on the homebuying timeline, it’s important to focus on building up your credit score and saving for a down payment,” Shirshikov said. “This can be done by paying off any existing debt, making timely payments on credit cards and loans, and setting aside a portion of your income each month.”
He said you can also consider alternative options, such as purchasing a fixer-upper or looking into government-assisted programs that can make homeownership more attainable.
“It’s never too late to make purchasing a home part of your financial goals,” he said. “It just takes a bit of planning and discipline.”
Other Options To Consider
Alex Shekhtman, CEO and founder at LBC Mortgage in North Hollywood, California, agreed that there are plenty of options to help you buy your first home.
“The most important thing is to do your research so you know what you can afford and how much you’ll need for a down payment,” he said. “Additionally, take advantage of programs such as FHA loans or USDA mortgages that require smaller down payments or don’t require a credit check.”
Beyond that, he said, saving up money can make all the difference.
“Putting aside even small amounts each month will eventually add up over time and help you get closer to your dream of homeownership,” he said.
Joshua Massieh, CEO and mortgage broker at Pacwest Funding in San Diego, suggested opting for a little less square footage or a different type of home than you initially envisioned.
“If you’re not in a home in your 30s and want to be, the best way is to jump right in and buy something small — say a condo,” he said. “Make sure you can afford the payments and that if you ever decide to leave the home, you can rent it.”
Of course, you will need money for a down payment, but you might not need as much as you think you do.
“Most lenders just want 5% to 10% down these days,” he said. “Make sure you have a credit score of 650 or above and have little to no recurring debt.”
There is no age limit to purchase your first home. If you had a timeline you didn’t meet, that can feel discouraging, but try to stop putting pressure on yourself.
Keep working toward your goal of homeownership and it will happen. One day, you’ll get the keys to your first home and it will no longer matter how long it took you to get there.
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This article originally appeared on GOBankingRates.com: Here’s the Age of the Average First-Time Homebuyer and Why It’s Not Too Late If You Are Older