The typical first-time homebuyer has aged substantially, with the median age of cash-paying entry buyers climbing to 54 years old. Family assistance, ranging from direct cash gifts and inheritances to tapped home equity, is increasingly deployed to secure homes in highly competitive housing markets. Meanwhile, non-cash buyers are liquidating alternative assets such as stocks and cryptocurrency to accumulate the necessary funds. Experts anticipate this dependence on inherited capital will intensify as the baby boomer generation continues to age.
Key points
Generational wealth transfers and inheritances are serving as vital advantages for purcha…: Generational wealth transfers and inheritances are serving as vital advantages for purchasing an initial home without financing.
Escalating mortgage rates are driving families to supply upfront cash, private loans, or…: Escalating mortgage rates are driving families to supply upfront cash, private loans, or tapped home equity to secure deals.
A growing divide is forming between recipients of family wealth and independent savers re…: A growing divide is forming between recipients of family wealth and independent savers reliant on traditional wages.
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The share of first-time homebuyers remains at a near-record low of 22% as a housing shortage and high prices sideline many, according to a new report by the National Association of Realtors. But those who are managing to buy are older and wealthier than in the past, and 1 in 10 paid all cash, a record high since such data was collected starting in 2003.
"Inheritances are really driving this," said Jessica Lautz, deputy chief economist at the NAR.
First-time buyers who paid all-cash were more likely than those who financed a house to use an inheritance (28%) or proceeds from the sale of an inherited property (21%). They were also older.
NAR finds the median age of all first-time buyers remains at 40, a record high. For first-time buyers who financed a purchase it was 38, while for those who paid all-cash it was 54. "They waited a significant period of time for that generational transfer of wealth to come through," Lautz said.
For first-time buyers overall, personal savings was the biggest source of funding for a down payment.…
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