Why First-Time Buyer Stats Crashed to 21 Percent and What It Means for 2025
Market Insights/ Atwood Group Brokered with Realty One Group
Every week another headline claims first-time buyers are disappearing. NAR’s newest report shows first-time buyer stats crashed to 21 percent, a huge drop from the typical 40 percent we used to see before the Great Recession.
That number looks alarming, but there’s a reason the data seems broken. Different groups measure first-time buyers in completely different ways, and it creates a confusing picture.
Here’s the truth without the noise.
NAR Counts Only True First-Time Primary Residence Buyers
NAR uses the cleanest definition out there.
They ask one question.
“Was this your first home purchase?”
If you bought a primary residence, you’re in.
If you bought an investment or vacation home, you’re out.
Mortgage data and federal definitions are much looser. HUD and the IRS count anyone who hasn’t owned a home in three years as a first-time buyer. That includes:
divorced buyers
widowed buyers
former owners who re-entered the market
buyers who sold long ago and are now stepping back in.
Those buyers inflate the numbers everywhere except in NAR’s report.
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Why First-Time Buyers Look Older Than Ever
The median age of a first-time buyer is now 40. That’s not a small shift. It’s a complete change in who can afford to buy.
Here’s what’s driving it:
Affordability is brutal. Prices, rates, and competition squeeze out younger buyers.
Cash is showing up more often. Eight percent of first-time buyers paid cash last year, backed by family wealth transfers.
Millennials never caught up. Homeownership for buyers under 35 sits at 37 percent, still behind Gen X and boomers at the same age.
Life events reset the clock. Divorce and loss push more buyers into “first-time buyer” status under federal definitions but not under NAR’s.
If you feel like younger buyers are struggling more than ever, they are.
The Hidden Group NAR Doesn’t Count
A growing trend isn’t showing up in NAR’s numbers.
Some buyers can’t afford a primary home where they live so they get creative:
they buy a rental out of area
they partner with friends or family
they invest first to build equity
These buyers are entering homeownership, just not the way the old playbook looked.
But NAR doesn’t count them because they didn’t buy a primary residence.
So yes, first-time buyers are still out there. They’re just taking different paths.
How NAR Actually Collects the Data
The NAR survey covers July 2024 through June 2025.
More than 6,100 recent buyers responded through paper, online, and text.
It’s the only dataset that measures people who bought their first primary residence in the last year. That’s why their 21 percent number matters. It’s the truest snapshot we have.
First-Time Buyers Didn’t Disappear. The Market Changed.
They’re not gone.
They’re older.
They’re dealing with higher costs.
They’re navigating tight inventory.
And they’re competing with cash.
If you’re trying to break into the Phoenix Valley market as a first-time buyer, I’ll help you see what’s possible and where the real opportunities are. No guesswork.
FAQ:
Q: Why are first time home buyers older in 2025?
A: Affordability, higher interest rates, and more cash-backed competition push the average age up. Median age is now 40.
Q: Why does NAR’s first time buyer report look different from mortgage data?
A: Mortgage data counts people who haven’t owned in three years. NAR only counts true first-time primary residence buyers.
Q: Are first-time buyers still buying in the Phoenix area?
A: Yes. But they’re older, more strategic, and often need guidance to win in a tight inventory market.
Q: Why are cash first-time buyers increasing?
A: Wealth transfer. Younger buyers are receiving help from family and choosing to buy with cash to stay competitive.
Q: Does NAR count first-time investor buyers?
A: No. If you bought an investment property instead of a primary home, NAR doesn’t count you as a first-time buyer.
Contact:
Debbie Atwood
📞 425-750-4970
🌐 www.atwoodgrouprealestate.com
