NAR Research has been asking primary residence home buyers the same direct question since 1981: "Was this your first home purchase?" This is a straightforward question that, in recent weeks, has raised many others. Why? Because first-time buyers in NAR's Profile of Home Buyers and Sellers data show an all-time low of just 21% of primary residence home buyers. Before the Great Recession, the typical share of first-time buyers was 40%. Other data sets show a steady share of first-time buyers. Let's parse out the definitional differences.

Mortgage data typically shows a much higher share of first-time buyers. Let's go back in history to understand why. Since 1990, there has been a bill that, for the purposes of federal housing assistance, proposed a definition of first-time buyers. This definition has been widely adopted and is used today by HUD and by the IRS for the first-time home buyer tax credit. By this definition, anyone who has not owned a home for a three-year period prior to buying is a first-time buyer. Anyone who is divorced or widowed and then purchased a home solo is a first-time buyer. One can quickly understand why any share of first-time buyers would differ.

Notably, there are more divorced individuals today than there were in 1980 or even in 1990, which would inflate the share of first-time buyers. After the Great Recession, there was a large share of homeowners who stepped out of ownership and have since rebounded into homeownership after a period of renting or living with family.

Additionally, mortgage data, by definition, would not include all-cash buyers. What has been interesting to watch over the last two years is the growing share of first-time buyers who can purchase with cash. This last year, 8% of first-time buyers used cash to purchase. The U.S. is starting to see transfer of wealth to younger generations, and those younger generations are using that inheritance to make a smart purchase: a home.

All cash first-time buyers are substantially older than those who finance. Even using medians as a measure of central tendency, the age of first-time buyers has moved up. The Profile of Home Buyers and Sellers (HBS) also showed the median age of first-time primary residence buyers was 40. Historically, NAR's data showed a first-time buyer who was in their late 20s to early 30s.

Using Census data, one can see the continued decline in homeownership among those under 35. The share in 2024 stood at 37.1%, which is a continual two-year decline. The millennial homeownership rate has never reached the level that Gen Xers and baby boomers experienced at the same age.

NAR's data is only for primary residence home buyers. In other data sets, vacation home buyers and investors are included. In recent years, there has been a trend of first-time buyers becoming investors because they cannot find an affordable primary residence in their local communities. It is a creative way to enter homeownership and start earning housing equity. In some situations, even purchasing outside one's local area solo is out of reach, so these buyers team up with family or friends to make an investment purchase. This would not be included in NAR's data as a first-time buyer, as NAR only examines primary residence buyers.

Census data from the American Housing Survey or the American Community Survey cannot capture the timing of the first-time buyer event. AHS tells us whether someone's current home is the first home they have ever owned, and whether they moved in within the last year. That can include people who bought their first home several years ago or inherited the home. But it cannot tell us whether they purchased that first home in the last year. Without the purchase date, AHS cannot produce the annual flow of first-time buyers.

The NAR data collection period is July 2024 to June 2025. This data will not allow a direct comparison with those who base data collection on a calendar year.  While the survey was previously available only in paper form, it is now mailed and texted to recent home buyers. Home buyers can take the survey via paper, online, or via a texted link. They can also now take the survey in both English and Spanish. Survey methodology was expanded to reach as many respondents as possible in as broad a pool as possible. This year, 6,103 recent buyers took the survey. The sample at the 95% confidence level has a confidence interval of ±1.25%.

Different surveys measure different things. The HBS is the only dataset that directly measures first-time buyers in the past year, and those buyers are disproportionately older in today's market. The share and age of first-time buyers is a direct reflection of today's housing affordability and inventory conditions in the past year, and those buyers are disproportionately older in today's market.