Challenges Today in Buying a Home: 9 Eye-Opening Charts

Feel like securing a home is increasingly difficult? You're definitely not alone.

Prospective homeowners nowadays tend to be older, earn more money, and are less likely to have young dependents at home compared to the past, according to historical analysis from the National Association of Realtors (NAR).

These evolving trends are primarily the result of decreasing housing affordability over several decades, explains Brandi Snowden, NAR's director of member and consumer survey research, in a discussion with Business Insider.

“We observe that it's increasingly challenging to afford homes, with higher salaries required to engage in the marketplace,” Snowden noted. “Additionally, buyers face a shrinking selection, often having to extend their search duration to find a suitable residence.”

Presented here are nine charts illustrating the transformation of homeownership in the United States over recent decades.

Data from the Census Bureau and the Department of Housing and Urban Development demonstrate a significant spike in the median new house price in the U.S. during the pandemic, reaching a peak of $442,600 in the last quarter of 2022.

Such climbing prices have made entering homeownership more challenging for many Americans, particularly first-time purchasers, as the growth in real household median income has failed to keep pace.

“We find that first-time buyers need to have increased wealth to successfully purchase homes, particularly with escalating home costs and mortgage interest rates,” Snowden remarked.

Mortgage Rates and Down Payments

The average fixed-interest mortgage rate for a 30-year term has been on an upward trajectory this fall.

By the week concluding on November 21, it stood at 6.84%, which is lower than a year prior yet still notable compared to the recent near 8% pinnacle in October 2023. This high rate, coupled with steeper home prices, results in heftier monthly mortgage dues.

“Elevated mortgage rates are posing a hurdle for first-time buyers, particularly over the past year,” Snowden added. “This might deter them from proceeding with home purchases currently.”

The typical amount someone puts down when buying a home has been generally on the rise since the financial downturn termed the Great Recession.

Back in 2009 and 2010, the median down payment was roughly 8%. Fast forward to 2024, common practice now includes down payments reaching about 18%.

While higher, these down payment levels have precedents: it was 20% during 1989 and once again 18% in 2001.

Snowden explains that many homebuyers, especially those venturing into dealing property for the first time, depend on financial gifts or loans from relatives and friends, even withdrawing from investments like stocks or retirement funds for this purpose.

Income Shifts and Age Trends

A rise in median household income for those buying their inaugural home suggests Americans generally need salaries nearing six figures to secure homeownership.

For context, in 1984, the average household earned about $22,420 annually (adjusted to approximately $66,000 in 2023 dollars), whereas new buyer households earned nearly $31,000 (or $91,000 in 2023 dollars). By 2023, median incomes approached $80,600, with first-time buyers bringing in around $97,000.

A report by Zillow earlier this year indicated that individuals now need to make over $106,000, a significant 80% increase from early 2020 figures, to afford homes comfortably.

There was a drop in homebuyer median incomes during 2021, partially due to relocations to more affordable locales such as smaller towns, according to a NAR analysis. It also noted a rising proportion of older, potentially retired, buyers.

Shifts in Buyer Profiles

The proportion of first-time homebuyers dwindled to 24% in 2024, down from 32% a year before and a peak of 50% in 2010 — the lowest since the NAR began compiling this information in 1981.

Such diminished demand primarily stems from affordability crises exacerbated by the diminished availability of starter homes.

These smaller, more affordable options for first-time buyers are less prevalent now and are more costly when available.

“Identifying a suitable property stands as the most challenging aspect for homebuyers aiming for success,” Snowden stated.

By 2024, the median age of people purchasing for the first time reached 38, a full nine years above averages seen in 1981. For repeat buyers, the median age has risen from 36 to 61.

Contrary to repeat buyers who are typically older with more financial reserves or house equity, aspirant first-time buyers, often youthful groups like millennials and Gen Z, lack the financial backing to secure a home.

Many people devote considerable funds to high rent, educational debts, credit card liabilities, and car repayments, Snowden noted, rather than saving for a house deposit.

Demographic Considerations

The percentage of individuals buying homes without children under 18 years old has swelled to 73%, 10 percentage points greater than a decade prior.

Those without child-related financial obligations often possess increased economic flexibility. Several of such buyers manage to conserve thousands of dollars annually, potentially geared toward home purchase expenses.

Couples who are married or live together without children are frequently described as DINKS—short for 'dual income, no kids.' Data from the Federal Reserve indicate that DINKs typically feature a median net worth exceeding $200,000.

Conversely, families with children frequently endure greater financial stress as parents direct a substantial share of income towards childcare, healthcare expenses, and education costs—factors making it harder to save for a home.

Changing Homebuyer Dynamics

Since NAR began data collection, single women purchasers have consistently outnumbered single male buyers, and this gap has expanded.

In 2024, single women represented 20% of all buyers, while single men's purchasing share fell to just 8%.

Snowden highlighted that women often see homeownership as a path to independence, post-divorce stability, or providing for children.

These female single buyers tend to be older on average than male counterparts. The median age for single women is 60, whereas it's 58 for men. “Women may purchase homes for themselves and their dependents, whether children or aging parents,” she clarified.

Jessica Lautz, NAR's deputy chief economist and vice president of research, observed that current homeowners can more readily engage in real estate transactions by leveraging accrued housing equity for all-cash purchases or substantial down payments on their desired properties.

Conversely, first-time buyers often face lengthy processes involving mortgages, potentially losing out on housing due to those better prepared financially for immediate transactions.

The number of buyers making purchases with cash has risen dramatically, from 7% in 2003 to 26% in 2024, according to data that focuses solely on principal residences, disregarding investment properties.