A record 10% of first-time homebuyers paid entirely in cash in 2024, according to the National Association of Realtors (NAR), as high home prices and borrowing costs sideline younger and less affluent buyers. The share of first-time buyers overall remains near a historic low of 22%, unchanged from the previous year, despite a surge in cash purchases among those who can afford to buy.
The median age of first-time buyers who paid all cash was 54 years old, compared to 38 for those who financed their purchase. The NAR report attributes this trend to inherited wealth, with 28% of cash buyers citing inheritance as their funding source and 21% using proceeds from the sale of inherited property. The median age of all first-time buyers also hit a record high of 40 years old, up from previous years.
For first-time buyers overall, personal savings remained the primary source of down payments, but the use of assets—such as 401(k)s, stocks, or cryptocurrency—surpassed financial help from family or friends. The report suggests older buyers have had more time to accumulate savings, while younger buyers may feel less comfortable asking for financial assistance as they approach middle age.
Real estate professionals report observing this shift in the market. One agent with 15 years of experience noted a significant change in the profile of first-time buyers over the past decade, describing them as older and more financially independent.
High borrowing costs and housing shortages continue to shape the market
The NAR report highlights persistent challenges in the housing market, including high mortgage rates and limited inventory, which have disproportionately affected first-time buyers. The report notes that the share of first-time buyers using inheritance is expected to grow as Baby Boomers enter their 80s and beyond, accelerating the transfer of wealth to younger generations.
The report also underscores a growing divide between buyers who can access generational wealth and those who are priced out of homeownership. As the NAR stated, "There is a growing divide among those who are saving independently and priced out of homeownership, versus those who are waiting on the sidelines but then given a generational transfer of wealth."
Wealth transfer reshapes homeownership landscape
The broader implications of this trend extend beyond individual buyers. The NAR estimates that Baby Boomers hold approximately $20 trillion in real estate assets, part of a projected $85 trillion wealth transfer to Gen Xers and millennials by 2048. However, high borrowing costs have discouraged older homeowners from downsizing or selling, slowing the release of properties onto the market.
Experts describe the wealth transfer as a slow trickle rather than a sudden wave, with the NAR noting that while the transfer is underway, its impact on the housing market remains gradual. The report emphasizes that inheritance is increasingly the difference between being priced out of the market and achieving homeownership for many Americans.