First-Time Buyers Fall to Record Low as Baby Boomers Reign Supreme

The share of first-timers breaking into the housing market fell to just 21% of homebuyers last year—a drop of three percentage points from the year prior and the lowest share since at least 1981, new data shows.

Baby boomers, meanwhile, continue to dominate, accounting for 42% of homebuyers and 52% of sellers, according to the latest Generational Trends Report from the National Association of Realtors®.

“The housing market remains sharply divided between homeowners with equity and first-time buyers trying to break in—many of whom are younger millennials,” says NAR Deputy Chief Economist Dr. Jessica Lautz. “For many younger households, affordability challenges and limited inventory are still making homeownership difficult to achieve.”

The findings arrive at a critical generational moment: As the youngest millennials (27) and the oldest Generation Zers (26) approach 30, they’re also nearing the cutoff age to maximize their net worth.

Individuals who purchase their first home by age 32 clock a 22.5% higher net worth by age 50 compared with those who wait to buy in their 40s, recent research from Realtor.com® shows. But persistent affordability challenges threaten to lock out this generation, just as the window passes.

What’s driving boomer dominance?

To understand the current market, it helps to look at the generation driving it.

The NAR report breaks the boomer generation into two distinct categories. Younger boomers, ages 61 to 70, had a significant edge, accounting for 27% of all recent homebuyers. Older boomers, ages 71 to 79, accounted for 15%.

Interestingly, these cohorts don’t make the most money—they actually rank fifth and sixth in median income among buyers. What they do have, though, is immense equity and lifestyle flexibility.

Previous research from Realtor.com estimates that boomers are sitting on nearly $19 trillion in home equity. In a market defined by high prices and high rates, that accumulated wealth is a powerful bargaining chip.

“Baby boomers are at a point in life when they have the flexibility to move, often with housing equity to help purchase their next home,” Lautz explains. 

That financial leverage gives them the freedom to move for lifestyle choices rather than career necessities. The report finds that the primary reasons baby boomers are purchasing homes is to be closer to friends and family, to retire, or to downsize.

“In earlier years, baby boomers—like millennials today—may have moved because of a job change or the need for a larger home,” Lautz adds. “Today, many baby boomers are embracing choice and moving to be closer to friends and family, to downsize, or to retire and enjoy a work-free lifestyle.”

And because they are less tethered to major job hubs, their moving patterns reflect a desire for space and community. Younger boomers were the most likely to purchase in rural areas and typically moved the furthest distance at a median of 45 miles. Meanwhile, older boomers heavily favored smaller communities, with 28% purchasing in small towns.

High rates and high prices hit first-timers hardest

Younger generations are working with less leverage and more constraints, and the divide is reflected in the data. 

Young boomers, older boomers, and the Silent Generation report the lowest share of buyers who financed their home purchase, at 61%, 54%, and 48%, respectively. That stands in sharp contrast to the 74% of all buyers who took out a mortgage, and a whopping 97% of younger millennials (the largest share of any generation) who had to finance their homes.

Younger buyers also had to finance a much larger portion of their purchase price. Gen Z financed a median of 91% of their home's cost, followed closely by younger millennials at 87% and older millennials at 85%. Meanwhile, younger boomers financed just 74% and older boomers only 65% of their purchase.

In 2025, that heavier reliance on financing translated into a significant affordability gap. The average 30-year fixed mortgage rate started the year at 7.1%, stayed above 6.5% for most of the year, and settled just above 6.1% by year-end. During that same period, the national median list price hovered between $400,000 and $450,000.

For a buyer purchasing a median-priced home at the height of the market and interest rates, that difference in financing is staggering. Relying on a minimal 9% down payment could result in a monthly mortgage payment of roughly $2,700, compared with just $1,700 for an equity-rich buyer able to put down 35%.

Those headwinds are creating real problems that can have lasting consequences.

“The longer that young Americans put off homeownership, whether that's by choice or by necessity, the less time they have to spend building equity in their home and the less wealth they accumulate,” says Realtor.com senior economist Joel Berner.

And while some may argue that the Great Wealth Transfer—expected to shepherd $124 trillion in wealth between generations, largely passing from boomers to millennials—will even the scales, the reality is rarely that simple.

“Some certainly stand to inherit some wealth, which can help them break into homeownership, but not all have that luxury,” adds Berner. “Beyond the capital-E equity issues of relying on inheritance that not all have access to, the time lost in which they could have been building up home equity and developing strong savings habits adds up.”

To his point, homeowners hold substantially more wealth than renters, with a median net worth typically 30 to 50 times higher, according to the Survey of Consumer Finances.

Despite high incomes and educational attainment, millennials still struggle

Younger millennials were among the hardest hit by these economic realities, the NAR report shows. Even though they represent the most educated group of buyers—with 75% holding at least a bachelor’s degree—their share of first-time buyers plummeted 11 percentage points from the previous year, dropping from 71% to 60%.

The story is remarkably similar for older millennials. Despite notching the highest median income of all generations at $132,700, their share of first-time buyers still fell three percentage points, sliding from 36% to 33%.

However, for the older millennials who were able to successfully navigate the market and transact, existing equity is playing a larger role. That financial leverage is translating directly into bigger houses, with this group purchasing homes with a median of 2,100 square feet—the largest of any cohort.

Part of that is simply a reflection of where this generation currently is in life, Lautz says.

“Older millennial buyers are now entering middle age, and with that comes a shift,” she explains. “This cohort is now the highest-earning generation of homebuyers, buys the largest homes, and is most likely to have children living with them. Those traits were once more commonly associated with Gen X buyers, who are now increasingly looking toward empty nesting and retirement.”

Gen Z women lead the way

Interestingly, Generation Z is emerging as a bright spot in a tough market—making up a small but decisive 4% of homebuyers.

“What stands out about Gen Z is how confidently they’re beginning to define homeownership for themselves,” Lautz notes.

The youngest generation of buyers enters the market with the lowest median income of any cohort ($76,000), and the highest share of single female buyers—accounting for 35% of the cohort, compared with just 25% of buyers overall.

“They may still be a small share of the market, but they’re already challenging old assumptions about who buys a home and when. For many of these buyers, marriage and children are no longer the defining milestones before a home purchase. The driving force is simply the desire to own a home of their own.”

Gen Z's determination is a sign of hope for the year ahead—one that Berner says should get easier for first-timers across the board.

“Rates are lower than they were last year, home prices continue to fall, and inventory continues to grow, if at a slower pace,” Berner says. “Also, it's another year in which first-time buyers have been saving up cash for down payments. They'll have a more welcoming market and more money to spend in 2026 than 2025.”