First-time homebuyers hit 44-year low, but affordable metros still offer an opening

First-time buyers fell to 21% of U.S. home purchases, the lowest share since 1981, even as metros like Pittsburgh, Detroit and St. Louis remain within reach for households earning local median incomes. The gap underscores how homeownership has become far more geography-dependent, with affordability still available in parts of the Midwest, South and Rust Belt. Why it matters: - First-time buyers now account for just 21% of the U.S. home market, a 44-year low that signals how much harder homeownership has become in expensive metros. - The national average masks a split market, where buyers in lower-cost regions can still enter ownership at prices that fit local incomes. - The affordability divide shapes who can buy, where they can buy, and how long they wait before getting into the market. What happened: - The National Association of Realtors 2025 Profile of Home Buyers and Sellers, covering transactions from July 2024 through June 2025, found the first-time buyer share at its lowest level since tracking began in 1981. - NAR put the typical first-time buyer at age 40, an all-time high, compared with age 29 in 1981. - Before the 2008 financial crisis, first-time buyers typically made up about 40% of purchases. - A separate analysis of Census Bureau data found seven of the 10 metros with the highest homeownership rates among people under 35 are in the Midwest. - Pittsburgh, Detroit and St. Louis were the only three of the 50 largest metros where a median-income household could afford the typical home, according to Realtor.com’s 2025 Affordability Report. The details: - The pressure is heaviest in coastal and Western metros, where prices and limited inventory keep many buyers on the sidelines longer. - Affordable metros cited in the report include Columbus, Cincinnati, Indianapolis, Grand Rapids, Des Moines and Omaha, where entry-level prices align better with local job growth. - In Pittsburgh, a household earning about $73,000 would spend roughly 27% of its income on a median home priced near $250,000, just under the standard affordability threshold. - Nationally, Realtor.com’s report found a typical household would need to spend about 45% of its income to afford a median-priced home. - The American Enterprise Institute ranked Pittsburgh the most affordable of the 60 largest metros in 2024, with an affordability ratio of 2.7, compared with 4.8 in San Jose, the least affordable. - The median age of all buyers reached 59, while repeat buyers hit 62 and first-time buyers reached 40. - The share of buyers with children under 18 fell to a record low of 24%, down from 58% in 1985. - Financial assets such as 401(k) accounts passed family gifts as a source of first-time down payments for the first time. - NAR also reported that inheritance use among first-time buyers reached an all-time high. - The typical seller in 2025 had owned a home for 11 years before selling, the longest median tenure on record. - Homes sold without an agent fell to 5%, the lowest level on record. - All-cash purchases rose to 26% of transactions over the past year, an all-time high in NAR’s survey of primary-residence buyers, excluding investors and vacation homes. Between the lines: - The headline national decline reflects a market where affordability is increasingly determined by location, not just income or age. - Buyers in lower-cost metros can still compete, while would-be owners in high-cost markets are forced to save longer, buy later or rely more on outside help. - The high cash share suggests repeat buyers with accumulated equity still have an advantage, which makes entry-level inventory even more valuable in affordable metros. - The resale market in those metros stays active because owners of inherited or dated homes have more than one exit option, including cash offers and as-is sales. What’s next: - Buyers are likely to keep targeting metros where wages, prices and inventory still line up, especially in parts of the Midwest, Rust Belt and South. - Sellers in those markets may continue to see demand from cash buyers and direct home-buying services that promise faster closings. - The broader homeownership gap will likely remain tied to local affordability unless prices, inventory or wage growth shift materially. The bottom line: - The path to a first home is harder than it used to be, but it has not disappeared. It has narrowed into the metros where prices still make sense relative to local incomes.