The share of first-time homebuyers has fallen to 21% of all transactions — the lowest level since the Национальная ассоциация риэлторов (НАР) began tracking the data in 1981.
Для риелторы, the shift is not a temporary blip. It’s a structural change reshaping how agents build their businesses, talk about value and prepare for a future in which the traditional pipeline of new homebuyers has stalled.
“When first-time buyers fall to just 21% of the market, it fundamentally shifts the agent business from one built on volume to one centered on expertise and long-term value,” said Alex Vidal, president of ЭРА Недвижимость. “For decades, first-time buyers made up closer to 40% of transactions, creating a reliable entry point for new client relationships, but we haven’t seen that level since before the Great Recession.”
The decline carries a hidden consequence for the profession itself; fewer first-time buyers means fewer entry points for new agents, said Ruth Krishnan, head of the Компас-аффилированный Krishnan Team в Сан-Франциско.
“If there are fewer first-time homebuyers, it will be harder for new agents to enter the real estate business,” she said. “Many new agents cut their teeth on first-time homebuyers. It’s not unusual for someone to meet a buyer at an open house and start working with them.
“Alternatively, many first-time homebuyers often reach out on Zillow and begin working with [the] agent [who] shows up to show them the house, which is often a younger agent who is working the leads of a bigger team that is paying for those leads.”
In Austin, Texas, agents are seeing a similar dynamic play out.
“It definitely changes things,” said Lauren Kennemer, a Compass Realtor based in Austin, Texas. “For a long time, first-time buyers were how a lot of agents built their business and future pipeline. With fewer of them in the market, there’s been a shift toward really leaning into repeat clients and referrals.
“So, instead of focusing on volume, agents are focusing more on relationships — staying in touch, being a resource and thinking long-term.”
Not every market is feeling the shift equally. In Cottage Grove, Minn., broker-owner Justin Fox of Специалисты REMAX said the impact has been less pronounced.
“Aside from [fewer] overall units sold, which isn’t necessarily related to first-time buyers, we haven’t seen a meaningful impact in our market,” he said. “Homes priced at or below our median sales price, that are priced appropriately, are still moving and freeing up those sellers to move up.
“Although townhouses and condo sales aren’t as robust as single-family homes, I believe much of that is due to insurance rates and their impact on the monthly association fees.”
Why boomers staying put means fewer homes for everyone
Бэби-бумеры now dominate both the buying and selling sides of the market, accounting for 42% of purchases and 55% of sales, according to NAR.
Meanwhile, older millennials (roughly ages 36–45) — now the highest-earning buyer cohort at a median income of $132,700 — are purchasing larger homes and leveraging accumulated equity rather than entering the market for the first time, according to those surveyed by NAR.
The aging of the baby boom generation has not produced the flood of inventory many analysts anticipated.
“Baby boomers own a disproportionate share of U.S. housing and, for now, they’re largely staying put,” said Ginger Wilcox, president of Better Homes and Gardens Недвижимость. “The long-anticipated wave of listings has not materialized because many homeowners are remaining in their homes longer than expected, even as lifestyle and care needs evolve. That reality continues to constrain inventory.”
Fox offered additional perspective on what happens when boomers do sell.
“Many are not repurchasing replacement homes,” he said. “Accordingly, owners exiting the market [not repurchasing] may begin to lower demand if they are not replaced by first-time buyers or buyers re-entering home ownership after an ownership break [due to] credit issues, family changes or strategic financial breaks.”
In San Francisco, Krishnan said many boomers are choosing to stay despite having more space than they need.
“I’ve not personally seen a ton of the baby boomers selling,” Krishnan said. “Many sellers that I speak to in this demographic have low interest rates on their homes and love living in San Francisco. Even though процентные ставки are not as high as they once were, when they’re looking to downsize in San Francisco, they just don’t really see the value of what they can get versus what they will give up, given the interest rates.
“So, even though the house is more than they need, in many cases, they’re just staying put. Many of these people see their mortgage as an asset, and I think, at least in San Francisco, until interest rates go down, many baby boomers will choose not to sell.”
Vidal said many boomers choosing to downsize often have significant equity and cash.
“That’s allowing them to outcompete first-time buyers for a limited supply of smaller or more affordable homes,” he said. “The result is a market where inventory remains constrained, competition stays elevated and affordability challenges persist — particularly at the lower end of the price spectrum — unless new supply meaningfully increases.”
How agents must change conversations about value
With repeat purchasers now representing nearly 80% of buyers, agents cannot rely on the emotional pitch of the “American Dream” alone.
Today’s buyers arrive with very specific expectations, Wilcox said.
“First-time buyers are entering the market later in life and with a clearer sense of what they want than previous generations,” she said. “They have been watching the market longer, they know their priorities and they think carefully about how a home will function across the full arc of their lives, not just right now.
“Buyers are prioritizing livability over square footage. A smaller home with a flexible, well-designed layout appeals more than a larger one that doesn’t adapt to how people live.”
Fox took a blunter approach to the rent-versus-buy conversation.
“With all of the online experts saying it’s cheaper to rent, people need to be reminded that renting is 100% interest,” he said. “When renting, you will never benefit from principal paydown. In 30 years, a renter will have nothing to sell. In 30 years, a homeowner will own their home outright and can sell it for cash to fund their retirement or pass along to their heirs.”
For repeat buyers, the conversation looks fundamentally different.
“They already ‘get’ homeownership, so it’s less about selling the dream and more about helping them make smart moves,” said Kennemer. “They’re thinking about equity, timing and what makes sense for their next stage of life.
“So, our role is more about guidance — helping them look at the bigger picture and make decisions that actually move them forward, not just into another house.”
In high-cost markets like San Francisco, the path to homeownership often involves multiple steps over many years.
“The vast majority of first-time home buyers do not have the initial budget to buy their forever home,” Krishnan said. “Instead, they purchase the best home that they can afford at that time. Over the next five or six years, they save more and gain equity. It’s not unusual for Bay Area residents to move up substantially in their careers, and when the stars are properly aligned, the home also appreciates during that time.
“They take the equity from their first home, plus their additional savings, and they buy the next home. Sometimes it can take three homes to get to the end of the journey.”
Preparing for a generational handoff
For agents and brokerages, affordability remains the single biggest hurdle, but the nature of that hurdle varies by market.
“In our markets we have pretty robust down payment assistance programs available, so down payment isn’t generally a roadblock,” Fox said. “It’s the monthly payment, which includes insurance and property taxes that makes the biggest impact. In many markets, dramatic increases in property taxes are forcing lower-income buyers, as well as investors, to consider different areas with lower property tax burdens.
“In all areas, we’re coaching our clients to consider things that could affect homeowners insurance rates, such as older roofs and past water damage.”
In San Francisco — even with intense competition — brokerages are finding small ways to ease the burden.
“I know that Compass recently signed a deal with Ракетная ипотека that allows clients working with Compass agents to get 1% off the interest for the first year,” Krishnan said. “This doesn’t solve the cash issue, but at least it helps a bit with initial affordability.”
Fox does not expect the low first-time buyer share to persist for years.
“Rising costs forced many buyers to pause their searches, but we’re already seeing many return as they’ve readjusted their finances and living situations,” he said. “Insurance and mortgage rates seem to be normalizing, so many of the wait-and-see-type are also returning. Agents need to focus on their value and their relationships.”
Vidal agreed that demographics will eventually force a reset.
“If first-time buyers were to remain at historic lows for an extended period, it would create continued pressure on prices, sustained demand in the rental market and force brokerages to rethink long-term growth strategies — but it’s not a permanent state,” he said. “Demographics alone make that clear: millions of homes currently owned by baby boomers will eventually transition, even if some are retained as rentals along the way.”
Kennemer offered a warning for a scenario in which first-time buyers never recover their market share.
“First-time buyers are what keeps everything moving. Without them, the pipeline gets thinner,” she said. “So, the industry is going to have to adjust — whether that’s better financing options, new ways to help people get into homes or just doing a better job of building relationships earlier.
“The agents who think long-term and adapt to that are the ones who will stay ahead.”
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