The Great Housing Divide: Why First-Time Buyers Are at a Record Low

The dream of homeownership feels like it's changing. A recent survey from the National Association of Realtors (NAR) reveals a widening split in the U.S. housing market. While the share of first-time homebuyers has plummeted to an all-time low, the number of all-cash buyers has hit a record high. This growing divide highlights the huge challenges new buyers face compared to established homeowners.

This analysis is based on a report from Homes.com, which detailed the findings of the NAR's 2025 Profile of Home Buyers and Sellers.

The First-Time Buyer Squeeze

The most alarming statistic from the report is the sharp decline in new entrants to the market.

• The share of first-time homebuyers dropped to just 21%. This is the lowest level since the NAR began tracking this data in 1981.

• At the same time, the median age for a first-time buyer has risen to 40, another all-time high. This is a huge shift from the 1980s, when the typical first-time buyer was in their late 20s.

These figures show just how tough it is for new buyers to get a foot in the door.

The Rise of the All-Cash Buyer

On the other side of the divide are buyers with deep pockets. The survey found that 26% of all home purchases were made in cash, matching the highest share ever recorded.

This trend is even more pronounced among repeat buyers:

• A full 30% of repeat buyers paid entirely in cash, needing no mortgage at all.

• Their median down payment was 23%, the highest since 2003, and it's largely fueled by equity from a previous home.

The Power of Equity

The survey highlights a key advantage for existing homeowners. They are staying in their homes longer than ever before, with a median of 11 years. This extended time in the home, combined with rising prices over the last decade, has allowed them to build substantial equity.

That equity is a powerful tool. The report found that 54% of repeat buyers used the proceeds from selling their primary residence to fund their down payment. In stark contrast, 59% of first-time buyers had to rely on their personal savings.

A Tale of Two Markets

The NAR report, which covers the period from July 2024 to June 2025, showcases a market with two very different experiences. On one hand, established homeowners are leveraging their wealth and equity to make all-cash offers and secure large down payments. On the other, first-time buyers are struggling to save enough, pushing the dream of homeownership further out of reach.

While the article notes that the market has seen some changes since the survey (like slowing price appreciation and more for-sale listings), the fundamental challenge for new buyers remains a significant hurdle.

This blog post is based on findings reported by Moira Ritter for Homes.com.