Homeownership Rates Are Falling for All Ages, Not Just Millennials

While the median age of a first-time homebuyer has continued to climb as affordability has worsened, fewer people of all ages can afford to own a home, concludes a new report.

With a national median home price of $415,450 in March, according to Realtor.com® data, it's no surprise that younger people are having a tough time affording a home—but a think tank report shows that it isn't just the younger generations that are struggling.

"The mistake is to assume that affordability pressures mainly delay younger buyers," says the report by the American Enterprise Institute (AEI), which analyzed data from the New York Fed. "In reality, they reduce homeownership across the entire age distribution."

In 2000, 9% of 20-year-olds owned a home. That had plummeted to a mere 5% in 2022.

The gap continues across the age spectrum up to 59 years, where about 83% of people owned a home in 2000. But in 2022, that has fallen to 77%. Millennials have been hit the hardest, with ownership at ages 36 to 48 dropping the most over a decade.

In 2000, 69% of 40-year-olds owned a home. In 2022, that had tumbled more than 10 percentage points to 58%. This is the age at which Americans are generally firing on all cylinders careerwise, so the fact that this is also the age that saw the sharpest decline in homeownership is concerning.

The trend has troubling implications for U.S. households, says Realtor.com senior economic research analyst Hannah Jones.

"Homeownership has historically been the primary vehicle through which American middle-class families build and transfer wealth," she says. "If lower- and middle-income households never accumulate home equity, not only do they miss out on appreciation themselves, but there is nothing to pass down, no down payment gift to a child, no paid-off home for retirement."

Jones warns that the compounding effect across generations could meaningfully widen the wealth gap between homeowners and renters for decades to come.

No age group is unaffected, but millennials are hit hardest

The typical thinking is that older millennials and Gen-Xers and perhaps even boomers would be able to more easily afford a home, but the Fed data shows that this isn't necessarily the case.

As home prices surged over the past couple of decades, ownership rates across all ages from 18 to 59 have dropped, according to data compiled by the U.S. Census Bureau and AEI Housing Center.

"When purchasing power declines, fewer people buy homes at 28, but fewer also buy at 38 or 48," says the report. "Some younger households delay buying—but many never buy at all. At the same time, older households who might have become first-time buyers under more favorable conditions are also shut out.

"The entire age–ownership curve has shifted downward," says the report. The report cuts off at age 59, which included only the two youngest birth years of boomers in 2022, the survey year available.

High home prices can affect even an older homeowner sitting on decades' worth of home appreciation. The homeowner may be reluctant to give up a lower mortgage rate (the "lock-in effect") and may also feel that moving isn't worth it unless a comparable home is available at a lower price.

With age, people may prefer to remain close to familiar surroundings and support system rather than sell their home and move to a lower-cost state simply to make the sale financially worthwhile.

“The implicit assumption we believe many are making is that the current generation of seniors will downsize and move on from their homes at similar ages and similar rates as previous generations,” explains Cotality principal economist Matt Delventhal. He notes that this may not be the case.

Additionally, older working Americans who didn't bank equity from decades' worth of appreciation may simply not have the income to buy a home, as salaries have generally not kept pace with skyrocketing home prices.

The typical homebuyer in a coastal state must earn $150,000-plus to afford a home. However, the median salary in America is far below that—only $62,088 in 2026, according to the U.S. Bureau of Labor Statistics.

"While rising home prices and elevated mortgage rates get most of the attention, wage growth is the other half of the affordability equation, and arguably the more stubborn problem," says Jones. "Housing costs have outpaced incomes for more than five years, steadily widening the gap between what a household needs to earn to qualify for a home and what most households actually earn."

That gap between wages and home prices doesn't just delay homeownership, it also eliminates it as an option entirely for many low- and middle-income families, she says.

"The result is that homeownership increasingly functions less like the broadly accessible wealth-building tool it once was, and more like a financial milestone reserved for those who were already well-positioned to begin with."

Affordability and the age gap

Bicoastal Coldwell Banker agent Cara Ameer, a broker for 24 years, tells Realtor.com: "The age of the first-time homebuyer is definitely going up."

But she notes that affordability makes a big difference. In one of her markets, Orange County, CA, with a staggering median home price of $1.4 million, many people are choosing to rent "well into their 30s."

But in cheaper Northeast Florida, also a place with much more inventory, Ameer says that "it is much more possible for a first-time homebuyer to buy a home, given there are a variety of new-construction options with townhomes and single-family properties, and builders offering lower interest rates and paying a significant portion or all of the closing costs."

Chris Wands at The Wands Team in South Florida is seeing the opposite trend. He says that when he started in 2016, most Miami buyers were in their late 30s or early 40s. But as the city leaned more to primary homes and less to vacation homes, he began selling to a much younger clientele.

"A big part of that is higher earning potential earlier in certain careers, and we can't negate the fact that more wealth is being passed down from family," he tells Realtor.com.

The real problem

Overall, AEI concludes that using the age of the typical homebuyer is "a poor indicator of housing access, and that it is really income that matters the most."

"What matters far more than age is purchasing power—the ability to afford a home given income, savings, and borrowing costs," says the report. "Across all age groups, homeownership rises steeply with income relative to local area medians.

"Lower-income households are much less likely to own, while higher-income households buy earlier and at higher rates."

In other words, the current market—with higher interest rates, high home prices, and stagnant salaries—means lower homeownership rates for all except the wealthy.