First-time buyers get a little older

Today’s first-time homebuyers are renting for longer periods of time before buying more expensive homes than previous generations

F orget the idea of the young, newly married couple moving into their first home. Today’s first-time homebuyers are older and more likely to be single than those in recent decades, according to a recent Zillow analysis.

The analysis, which looked at data from the Panel Survey of Income Dynamics between 1970 and 2013, found that current first-time buyers are renting for an average of six years before buying their first home. They’re also buying homes that cost more than two-and-a-half times their annual income. In the 1970s, buyers only rented for two and a half years before buying and purchased homes that cost just 1.7 times their annual income.

The extended rental period and higher purchase price for today’s buyers partly can be attributed to where younger, millennial buyers are moving: toward growing job markets in large, more expensive coastal cities.

The average age of a first-time buyer is 33, on the leading edge of the millennial generation, with a median income $54,340 — about the same as buyers earned in the ’70s, adjusted for inflation. Today, just 40 percent of first-time buyers are married, compared to more than 50 percent in the late 1980s.

“Millennials are delaying all kinds of major life decisions, like getting married and having kids, so it makes sense that they would also delay buying a home,” Dr. Svenja Gudell, Zillow’s chief economist, said in a statement. “We know millennials value home-ownership and want to buy. The next challenge will be figuring out how they can save for a down payment and qualify for a mortgage, especially while the rental market is so unaffordable all over the country.”

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