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Buying a home used to be a major milestone in early adulthood. Today, many people are waiting longer—sometimes into their late 30s or even 40s—to purchase their first house. Rising home prices, larger down payments, and changing life priorities are all playing a role.

This lesson explores why homeownership is happening later in life and what that means for financial planning and wealth building.

The aging first-time homebuyer

Warm-up question: Do you think buying a home is still an important life goal? Why or why not?

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Nova Safo:. The share of home buyers who are first-timers is at an all-time low—one in five. That’s according to a new report from the National Association of Realtors. The group also says the median age of first-time buyers is now 40. Marketplace’s Mitchell Hartman has more on the consequences of this trend.

Mitchell Hartman: I meet Kim Tate-Wistrike at his new home on a tree-lined street in Portland, Oregon. The house is 120 years old with original moldings and huge bay windows.

Kim Tate-Wistrike: We moved in without anything, just bought a dining room table, a couple of pack-and-plays for the babies.

Mitchell Hartman: 17-month-old twins. Tate-Wistrike is 38. For more than a decade, he and his wife lived in Thailand. Back in the US with a young family, they started house hunting while moving from rental to rental.

Kim Tate-Wistrike: The market was pretty tough, and we actually bid above the market value, which was, you know, felt like a pretty bold move at the time, maybe not the right move.

Mitchell Hartman: But it was a move they could make, at least with savings in the bank and help from their parents. Their broker, Isreael Hill, sees a lot of similar first-time buyers.

Israel Hill: Definitely an older crowd. The cost of homes has gone up. Someone needs to have a substantial down payment and be pretty stable in their economics to be able to afford a property.

Mitchell Hartman: Data from real estate site Zillow confirm the trend, says senior economist Orphe Divounguy. The typical prospective buyer is 39.

Orphe Divounguy: They have to have a much higher income than they used to to grab onto the first rung of the homeownership ladder.

Mitchell Hartman: Some analysts have disputed the National Association of Realtors’ finding that the typical first-time buyer is as old as 40, though NAR stands by its data. Redfin has done its own analysis and concluded the average age of first-time ownership has risen gradually over the past two decades, says Chen Zhao, head of economic research.

Chen Zhao: Partly for affordability reasons, partly because people just do everything later in life. They get married later, they have kids later, right? So they buy a house later.

Mitchell Hartman: As to whether it’s a good idea to wait until age 35 or 40 to buy a first home, here’s Northwestern Mutual wealth management advisor Ashley Russo.

Ashley Russo: I like to remind people who are going for houses and it might be torturing themselves, right? Owning a home is not the only way to build wealth.

Mitchell Hartman: She says first priorities should actually be saving for an emergency fund and retirement. Orphe Divounguy at Zillow says delaying homeownership can have advantages.

Orphe Divounguy: If you are starting later and invested in the stock market, you’re probably in good shape.

Mitchell Hartman: There are benefits to buying at any age, says Mike Fratantoni at the Mortgage Bankers Association. While rents tend to go up, with a fixed-rate mortgage, a homeowner…

Mike Fratantoni: …locks in their housing cost and actually can result in significant buildup in wealth over time.

Mitchell Hartman: That’s if home prices keep going up and if you stay in the home long enough to build some equity. I’m Mitchell Hartman for Marketplace.

Vocabulary and Phrases:

1. median: the middle value in a set of numbers, where half are higher and half are lower
2. moldings: decorative strips or designs attached to walls, ceilings, or furniture
3. house hunting: the process of searching for a home to buy
4. bid: an offer to buy something, often in a competitive situation
5. down payment: an upfront payment made when purchasing a property, usually a percentage of the total price
6. prospective buyer: someone who is considering buying something in the future
7. emergency fund: money saved for unexpected expenses or financial emergencies
8. good shape: in a strong or stable condition, especially financially
9. fixed-rate mortgage: a home loan with an interest rate that does not change over time
10. build equity: to increase ownership value in a property over time as it is paid off or rises in price

Fill in the Blank Use the correct word or phrase from the vocabulary list.

1. The couple decided to __________ above the asking price to secure the property.
2. They admired the original wooden __________ in the historic house.
3. Over time, homeowners can __________ as their property value increases.
4. Saving for a large __________ can take years.
5. The __________ carefully reviewed their finances before making an offer.
6. The __________ home price in the city is higher than ever before.
7. Financial advisors recommend having an __________ before buying a home.
8. If your savings and income are stable, you are in __________ financially.
9. A __________ protects homeowners from rising interest rates.
10. After months of __________, they finally found a place they loved.

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Comprehension Questions:

1. What is the current share of first-time homebuyers in the market?
2. What is the median age of first-time homebuyers mentioned in the report?
3. Why is it harder for first-time buyers to enter the housing market today?
4. What factors, besides affordability, are causing people to buy homes later?
5. What financial priorities does Ashley Russo recommend before buying a home?
6. How can delaying homeownership sometimes be beneficial?

Discussion Questions:

1. Is renting a better financial decision than buying in some situations?
2. How important is it to have an emergency fund before making a large purchase?
3. Would you feel comfortable bidding above market value for a home? Why or why not?
4. How does homeownership compare to investing in stocks as a way to build wealth?
5. What factors are most important when deciding to buy a home?