A Shrinking Share of First-Time Buyers
The housing market is growing increasingly out of reach for younger Americans, and it shows. New data shared with Fortune reveals that the number of first-time homebuyers has plummeted to just 1.14 million in 2024—less than half of what it was in 2004, when it stood at nearly 3.2 million, according to the National Association of Realtors (NAR).
“The American dream is on life support for first-time homebuyers,” the article states, noting that young adults are either staying with their parents or turning to house swaps with older relatives just to get a foot in the door of the housing market.
Mortgage Rates and Home Prices Are Gatekeeping Young Buyers
Mortgage rates are still hovering near 7%, and the median-priced home now costs more than $422,000. That means Americans need to earn six figures to afford a typical home, according to NAR.
Those economic pressures are “gatekeeping” the housing market from first-time buyers—particularly Gen Z and millennials. Many are giving up on ownership altogether.
“It’s a dog-eat-dog world in today’s housing market,” the article warns.
Co-Living, Renting, and Family Support Are Becoming the Norm
“We’re seeing a reshaping of the housing ladder,” Alexandra Gupta, a real estate broker with The Corcoran Group, told Fortune. “Some first-time buyers are turning to long-term renting or even co-living models because the idea of owning a home has become so out of reach.”
“Others are relying on family support,” she added.
In Brooklyn, where Gupta is based, the typical first-time buyer is in their early to mid-30s, from a dual-income household making six figures. But even then, Gupta says, “the affordability gap is huge.” Many have spent years renting and saving, or they’ve received help from family. “It’s less about age and more about access to capital,” she said.
West Coast Prices Show No Mercy Either
Over in West Los Angeles, it’s no better.
“There’s a real mismatch between what people have saved and what homes actually cost,” Tami Pardee, founder and CEO of Pardee Properties, told Fortune.
The median condo price in West LA is about $940,000, Pardee said, with monthly housing costs exceeding $6,600. That includes mortgage payments, HOA fees, insurance, and assumes a 20% down payment. She noted this is more than $2,200 above the median rent.
“It really does take a village right now,” Pardee said. “For many young buyers, it feels out of reach, and that can be really discouraging.”
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Creative Solutions and Long-Term Planning Are Key
Jeff Lichtenstein, CEO and broker at Echo Fine Properties in Palm Beach Gardens, told Fortune that some young people are adjusting their lifestyles to save up. His own son, for example, has skipped vacations and dinners out and is living at home to build “buckets of savings” with a goal of buying a home in 2027.
He added that he’s seen more intergenerational housing swaps, where older relatives pass down homes instead of selling them outright.
“With boomers en masse nearing life expectancy, some homes will start to be passed down to live in rather than sold,” Lichtenstein said.
No Relief in Sight—But Don’t Give Up
While easing mortgage rates and an increase in starter home supply could help, Gupta cautioned that it “may not be as likely as we hope.” Her advice: plan early and stay the course.
“Don’t get discouraged if the process takes time,” Gupta said. “Patience, planning, and the right guidance go a long way in today’s market.”
She also recommended working with a local agent and looking into first-time buyer grants.