By the Numbers: A Shrinking Presence

According to the National Association of Realtors (NAR):

In 2010, first-time buyers accounted for about 50% of all home purchases.

By 2023, that share had fallen to just 26%, the lowest on record.

While the long-term historical average hovers around 38%, the trend over the last decade and a half suggests that affordability and accessibility are major obstacles.

This decline is especially striking given that Millennials and Gen Z are now the largest adult cohorts—yet they are not purchasing homes at the same pace as earlier generations.

Affordability Crisis: The Biggest Barrier

At the core of the decline lies a growing affordability crisis:

Rising Home Prices

Home prices have surged dramatically since the Great Recession, with the national median home price increasing over 100% since 2010. In many cities, wages have failed to keep pace with housing costs, making homeownership out of reach for many.

High Interest Rates

After years of historically low mortgage rates, the Federal Reserve’s rate hikes in 2022–2023 pushed mortgage rates to over 7%. Higher rates drastically increase monthly payments, reducing purchasing power—particularly for first-time buyers with limited down payments.

Student Debt and Cost of Living

Millennials, now in their prime homebuying years, are burdened with record levels of student debt. Combined with rising costs of rent, healthcare, and childcare, this makes it difficult to save for a down payment.

Structural Challenges in the Market

Beyond affordability, several systemic issues have compounded the problem:

Inventory Shortages

The U.S. housing market has long faced a shortage of entry-level homes. Builders have focused more on high-end properties, reducing options for budget-conscious first-time buyers.

Institutional Buyers

Large investors and hedge funds have increasingly bought single-family homes—particularly in post-2008 markets—driving up prices and reducing inventory available to individuals.

Tight Lending Standards

In the wake of the financial crisis, mortgage lending standards tightened considerably. Many younger buyers, especially those with less credit history or non-traditional income, find it difficult to qualify.

Generational Shifts and Lifestyle Changes

Cultural and economic shifts have also played a role in the changing dynamics:

Delayed Life Milestones

Younger generations are delaying marriage, children, and career stability—all traditional motivators for buying a home.

Urban vs. Suburban Preferences

Many Millennials prefer to live in walkable urban areas where homeownership is more expensive or simply not feasible due to high demand and limited supply.

Flexibility Over Roots

The rise of remote work and gig-based employment has made mobility a priority. Renting offers flexibility that buying does not.

Looking Ahead: Can the Trend Be Reversed?

Some recent developments offer hope:

First-Time Buyer Programs

Local and federal programs, such as down payment assistance and FHA loans, continue to support first-time buyers, though they have not kept pace with rising home prices.

Potential Rate Cuts

If the Federal Reserve eases interest rates in late 2025 or 2026, borrowing costs may come down—though this could reignite home price increases unless supply rises significantly.

Increased Focus on Affordable Housing

Policymakers are increasingly emphasizing the need for affordable housing construction and zoning reforms to promote entry-level home development.

Conclusion

The decline in first-time homebuyers over the past 15 years reflects a housing market increasingly out of reach for young and lower-income Americans. While the dream of homeownership hasn’t died, it has become significantly delayed—or reshaped entirely—for a large portion of the population.

Solving this crisis will require a multi-pronged approach: rethinking housing policy, expanding affordable inventory, easing lending restrictions responsibly, and addressing the broader economic conditions that are holding buyers back. Until then, the real estate market may continue to see first-time buyers play a smaller role than generations before them.

Please note: Any opinions discussed in this article belong solely to the author, Marissa Berends, and do not necessarily reflect the views of Capitol Lien.

About the Author
Marissa Berends is a Certified Abstractor and Industry Relations Coordinator at Capitol Lien, a nationwide due diligence and risk mitigation services provider. Since joining the company in September 2021, she has earned abstractor certifications in Minnesota, Nebraska, and North Dakota. She is pursuing her Wisconsin Title Examiner certification, which is expected to be completed in Fall 2025.

Marissa is involved with the following groups: Wisconsin Land Title Association’s (WLTA) Convention Committee & Young Title Professionals; Nebraska Land Title Association’s (NLTA) Convention Committee; Property Record Industry Association (PRIA) National Education Committee; Illinois Land Title Association’s (ILTA) Inclusion, Diversity, Equity & Acceptance (IDEA) Committee; and the National Association of Land Title Examiners and Abstractors (NALTEA).

About Capitol Lien

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