In 2021, the average age of a first-time homebuyer, defined as someone who hasn’t owned a home for the past three years, was 33, up slightly from the average age in 2018.
Regardless of age, if you qualify as a first-time homebuyer, specific programs may be available to help you. First-time homebuyer programs, which are typically controlled at the state and local levels, provide down-payment and closing-cost assistance to first-time homebuyers. These programs are valuable resources to those who may otherwise not be able to purchase a home.
Key Takeaways
- In 2021, the average age of a first-time homebuyer (an individual who hasn’t purchased a home in the last three years) was 33, which was up slightly from the average age of 32 in 2018.
- In 2021, the average age of a repeat homebuyer reached an all-time high of 56.
- The average credit score of a first-time homebuyer is 716.
The Average First-Time Homebuyer
In 2021, the average age of a first-time homebuyer was 33 years old. The average age of a first-time homebuyer has remained fairly steady over the years, while the average age of repeat homebuyers continues to rise. In 2021, the median age for repeat homebuyers reached an all-time high of 56 years old.
Married couples account for 60% of first-time homebuyers, while unmarried couples account for 9%. In addition, 19% of first-time homebuyers are single females, and 9% are single men.
Out of all the individuals buying a house, 28% did so because they desired to own a home of their own. This number increases when you look at first-time homebuyers—65% of whom cite wanting a home of their own as their driving goal.
How Average First-Time Homebuyer Ages Have Changed
The average age of first-time homebuyers has increased over the years. In 1981, the median age of first-time homebuyers was 29, but by 2021, the median age had increased to 33.
Interesting to note is that the percentage of married couples buying a home has decreased over the years, while the number of single females buying a house has increased. In 1981, 73% of first-time homebuyers were married couples, compared to 60% in 2021. And in 1981, 11% of first-time homebuyers were single females, compared to 19% in 2021.
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The rate of financing a home has also decreased over time. In 1981, 93% of first-time homebuyers financed their purchase, compared to 87% in 2021. And the average down payment has decreased from 20% in 1981 to 13% in 2021.
How Old Do You Need to Be to Buy a House?
Any age restrictions around a home purchase are largely decided by the lender, although state laws play a role in that as well. Most programs require borrowers to be at least 18 years old.
Minors can’t buy or sell property, but it is possible to transfer property to a minor through a guardianship or trust. In most cases, the minor would have beneficial ownership of the property with a custodian acting as a trustee.
Does Age Matter When You Buy a Home?
As long as you’re legally an adult, it doesn’t matter how old you are when you buy a home. The real issue is whether or not you’re financially prepared to buy a home, the odds of which increase with age.
For instance, the average credit score of first-time homebuyers is 716. But this type of credit score can be hard to achieve when you’re young. The average credit score of those in their twenties is 662, but it’s a number that can often take some time to increase. The average credit score for a 23-year-old is 630.
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Another factor that can play into your ability to buy a home is how much debt you have. Most lenders look for a debt-to-income (DTI) ratio of 43% or less, which means that your monthly debt payments account for less than 43% of your monthly income.
Frequently Asked Questions (FAQs)
How do you qualify for first-time homebuyer programs?
First-time homebuyer programs are controlled at the state and local levels, so the exact requirements can vary depending on where you live. Typically, you’ll need to be a first-time homebuyer with a low to moderate annual income.
Depending on the program you apply for, you may also need to meet certain credit requirements. For instance, you’ll need a credit score of at least 580 to receive maximum financing from an FHA loan.
What credit score does a first-time homebuyer need?
This depends on your lender and the type of loan for which you’re applying. The average credit score of a first-time homebuyer is 716, but you may qualify for a home loan if your score is lower than that. Government-backed loans usually come with lower credit score requirements.
For instance, VA loans don’t have a minimum credit score requirement. U.S. Department of Agriculture (USDA) loans require at least a 640, although they may offer manual underwriting. With Fannie Mae or Freddie Mac loans, the minimum score required is 620.
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FAQs
But is there a right age when these factors should be in place? And are these the factors Americans should consider when deciding to become a homeowner for the first time? In 2022, the average age of first-time homebuyers was 36, according to the National Association of Realtors (NAR). This is up from 33 in 2021.
What age are most first time buyers? ›
The average age of first time buyers is now 37, research from Money Supermarket reveals. The comparison site asked those who don't currently own a property when they hope to be able to buy and found 35% do not think they'll ever be able to buy their own home.
What is the average age of a single homeowner? ›
Moreover, while the age at which more than half of residents are homeowners in most U.S. states is about 35, in California that age is 49.
Who is a first time home buyer in USA? ›
The U.S. Department of Housing and Urban Development (HUD) expands that definition even further. According to the agency, a first-time homebuyer is: Someone who hasn't owned a principal residence for the three-year period ending on the date of purchase of the new home.
What is the average age of first time mothers? ›
One factor impacting the birth rate is the age at which women first become mothers. And the mean reached a high of 27.3 years in 2021, up from 27.1 in 2020.
What age do people move out? ›
The median age at the time of moving out was about 19 years. (See figure 1.) Table 1 shows that the likelihood of moving out before age 27 was correlated with several individual characteristics. Women were more likely to move out than men were, and Whites were more likely to move out than Blacks or Latinos.
What is the youngest age to buy a house? ›
A child under 18 cannot take legal title to property, so there are two ways in which the property can be held: a simple 'bare trust' or a more formally constituted trust, such as a life interest or discretionary trust. Under a 'bare trust', another person holds the title to the property as a nominee.
Will interest rates go down in 2024? ›
The expected decreasing inflationary pressure, plus the added impact of a falling federal funds rate in 2024, is likely to push mortgage rates lower. But while the Fed raised its benchmark rate fast in 2022–2023, it's expected to bring rates down at a much more gradual pace in 2024 and beyond.
Should I own a house at 25? ›
It doesn't make much sense to buy if: You plan to return to school or take any sort of sabbatical. Unless you're sure you're going to stay put and can afford the mortgage payment, or you know you can rent the house out for enough to cover its costs, now probably isn't the right time to buy.
What is the average age people pay off their mortgage? ›
But with nearly two-thirds of retirement-age Americans having paid off their mortgages, it means that the average age they have gotten rid of that debt is likely in their early 60s. Stats from 538.com, for example, suggest the age is around 63.
Homes built within the last 25 years look similar to new homes today with modern electrical/plumbing and similar construction techniques and building codes. In our area where there are many historic homes, a 25-year-old house is still considered 'newer'.
Is it smart to buy a house at 20 years old? ›
Great credit — Getting a mortgage loan at a young age can help you establish a solid credit history, which means a good credit score and ample financial opportunities later on. Tax benefits — Homeownership comes with several potential tax benefits that might lower your tax burden and increase your annual refund.
Did houses get cheaper after 2008? ›
It took 3.5 years for the recovery to begin after the recession began. A lot of buyers who bought in 2008, 2009 or 2010 saw their home prices decrease before the recovery started in 2011. Condos deprecated by only 12%, while single-family homes depreciated by 19% after the recession.
Did houses lose value in 2008? ›
On December 30, 2008, the Case–Shiller home price index reported the largest price drop in its history. The credit crisis resulting from the bursting of the housing bubble is an important cause of the Great Recession in the United States.
What age does the average person pay off their mortgage USA? ›
That makes sense, of course, as older Americans have had a longer time to make payments. But with nearly two-thirds of retirement-age Americans having paid off their mortgages, it means that the average age they have gotten rid of that debt is likely in their early 60s.
What percentage of Millennials own homes? ›
Millennials in America have hit a significant milestone according to the latest data from the U.S. Census Bureau: a homeownership rate of 51.5%.
What percentage of American homeowners have no mortgage? ›
Nearly 40% of U.S. homes are mortgage-free, census shows.
