Here's How Much Harder It Really Is To Be a First-Time Homebuyer Now vs. 1990
Owning a home is still part of the "American Dream" for many people, but achieving that dream has become less attainable over time. A new Realtor.com analysis found that the typical age of first-time homebuyers was roughly 30 in the early 1990s, but that rose to age 40 by 2025. That's due to several factors, including the time it now takes the typical household to save for a down payment.
Here's a closer look at how much harder it's become to buy a home in recent decades.
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First-Time Homebuyer Costs: 1990 vs. Today
If it feels like previous generations had an easier time affording a home, it's because they really did. These numbers show how affordability has shifted -- and how this impacts not just prices, but time, age and savings power for prospective buyers.
Here's a closer look at the stats.
Median Home Price
1990: $96,800
Today: $418,000 (+331.8%)
Median Household Income
1990: $31,000
Today: $85,000 (+174.2%)
Price-to-Income Ratio
1990: 3.11
Today: 4.9
Typical First-Time Buyer Down Payment
1990: 8.5% ($8,200)
Today: 10% ($41,800)
Years To Save for a Down Payment
1990: 3.2
Today: 9.7
Median Age at First Home Purchase
1990: 30
Today: 40
Why First-Time Homebuyers Face Higher Barriers Today
These homebuying statistics paint a pretty clear picture of why it's become much more difficult to afford a home.
"Over the last 30 years, home price growth has significantly outpaced wage growth, fundamentally reshaping the path to homeownership," said Hannah Jones, senior economic research analyst at Realtor.com.
As a result, in 1990, the typical first-time homebuyer was 30 years old; today, that age has climbed to 40.
"This decade-long delay is driven by a widening gap between incomes and prices, as well as a chronic lack of new construction that has resulted in a 4-million-home supply gap," Jones said. "Because home prices have risen nearly twice as fast as incomes since the 1990s, the typical household now would have to spend nearly 10 years saving for a down payment -- three times longer than the previous generation."
How Buyers Are Adjusting To Higher Housing Costs
To make homeownership more attainable, households must often combine personal strategy with persistence.
"Whether it involves moving in with family to accelerate savings, utilizing down-payment assistance programs, or targeting lower-cost areas and 'fixer-uppers,' taking that first step is critical," Jones said.
On a policy level, expanding the inventory of affordable new construction is essential to lowering the barrier to entry and keeping the path to the property ladder open for the next generation, she added.
Why Buying Earlier Can Build More Long-Term Wealth
It may take longer to afford a home, but the Realtor.com analysis shows that buying as soon as possible can greatly contribute to your overall wealth.
"Our research identifies a powerful wealth multiplier for those who enter the market by age 30," Jones said.
These early buyers see a 22.5% higher net worth by age 50, an average gain of roughly $119,000 compared to those who wait until their 40s.
"Homeownership serves as a form of 'forced savings' where monthly payments build equity through both principal paydown and long-term appreciation," Jones said. "By entering the market sooner, households lock in predictable housing costs that shield them from rising rents while allowing the compounding benefits of housing wealth to work for them over a much longer horizon."
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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