First-time homebuyers remain largely on the sidelines of the housing market, accounting for just 22% of purchases as older, equity-rich repeat buyers continue to dominate, according to new data from the National Association of Realtors (NAR).
The first-time buyer share edged up from last year's record low of 21%, but remains far below the roughly 40% historical norm before the Great Recession. Meanwhile, the median age of first-time buyers held at a record 40, compared with 62 for repeat buyers.
The findings point to a purchase market increasingly shaped by existing homeowners with accumulated equity, while prospective first-time buyers face substantial barriers to entry.
“Affordability remains the biggest hurdle for first-time buyers,” said Jessica Lautz, NAR deputy chief economist and vice president of research. “The share of first-time buyers is still about half the historical norm of 40% seen before 2008, and those saving on their own continue to face high rent, student debt, and a shortage of homes they can afford.”
Equity Gives Repeat Buyers An Advantage
Repeat buyers accounted for 78% of home purchases in NAR's 2026 Profile of Home Buyers and Sellers, with a median household income of $127,000, up from $111,700 a year earlier.
Their median down payment was 19%, more than double the 9% reported by first-time buyers. And 30% of repeat buyers purchased entirely with cash, removing the need for mortgage financing.
First-time buyers, meanwhile, are increasingly relying on family wealth to bridge the gap.
A record 10% purchased homes entirely with cash. Among those buyers, 28% used inheritance funds, compared with 9% of first-time buyers who financed their purchases.
For first-time buyers making down payments, 25% received gifts or loans from family and friends, while 30% tapped financial assets, including retirement accounts, stocks, or cryptocurrency.
“The housing market is beginning to see a generational transfer of wealth. It’s not yet a tsunami, but it is changing who can buy a first home and when,” Lautz said.
Mortgage Rates Add To The Squeeze
The affordability challenge has intensified as mortgage rates climbed in recent months.
Separate analysis released Thursday by Realtor.com found that a $2,000 monthly mortgage payment supported a home price $28,500 higher than a year earlier in January 2026. By October, that same payment supported a home price $33,600 lower than a year earlier.
That represents a $62,100 reversal in the year-over-year purchasing-power comparison.
The average 30-year mortgage rate reached 7.33% in October, up 107 basis points from a year earlier.
“Mortgage rates are not abstract to a family trying to buy a home,” said Danielle Hale, chief economist at Realtor.com. “They show up as the home they can no longer afford.”
The rate pressure comes on top of an already constrained housing market. NAR found that sellers had owned their homes for a median of 12 years before selling, the longest tenure on record, further limiting opportunities for prospective buyers.
What It Means
The divide between first-time and repeat buyers has direct implications for purchase lending.
Repeat buyers dominate transactions, but their substantial cash-purchase share means that dominance does not translate proportionately into mortgage originations.
First-time buyers remain a critical source of new mortgage customers, yet their limited purchasing power and dependence on outside financial assistance make qualification more challenging.
For LOs, that places greater importance on identifying eligible down-payment assistance programs, understanding gift-fund requirements, and helping borrowers evaluate purchasing power before beginning a home search.
It also points to opportunities among existing homeowners looking to put accumulated equity toward their next purchase.
NAR's survey covers primary-residence transactions completed between July 2025 and June 2026, while Realtor.com's more recent analysis captures the deterioration in affordability through October.
Together, the findings show a purchase market increasingly tilted toward buyers who already have wealth, while those trying to enter homeownership face a considerably steeper climb.
