Home prices have surged over the past two decades, and by most measures, affordability has worsened. Yet data from the New York Fed show that the median age of first-time buyers obtaining a mortgage has remained remarkably stable, hovering in the mid-30s.

At first glance, this seems counterintuitive. If buying a home has become more difficult, shouldn’t households be waiting longer to enter the market?

Not necessarily.

The mistake is to assume that affordability pressures mainly delay younger buyers. In reality, they reduce homeownership across the entire age distribution. When purchasing power declines, fewer people buy homes at 28, but fewer also buy at 38 or 48. The result is a broad-based decline in ownership rather than a simple shift in timing. As a result, the median age of first-time buyers changes little even as access to homeownership deteriorates.

To explore this result further, we construct a person-level measure of homeownership using Census and American Community Survey microdata that better captures individual outcomes than standard household statistics. By this measure, ownership rates have declined sharply across the board. Among adults ages 30 to 39, the homeownership rate fell from about 60 percent in 2000 to under 50 percent in 2022. But this is not just a story about younger households. Ownership rates are lower today at nearly every age.

In other words, the entire age–ownership curve has shifted downward.

Chart 1: Pseudo person–level homeownership rates by age (20–59): 2000 vs. 2022

Note: Person-level, weighted estimates using Census microdata. Income is measured as percent of county AMI. Sample restricted to incomes between 25–350% of AMI.

Source: Census and AEI Housing Center.

This helps explain why first-time buyer age is a poor indicator of housing access. What matters far more than age is purchasing power—the ability to afford a home given income, savings, and borrowing costs. Across all age groups, homeownership rises steeply with income relative to local area medians. Lower-income households are much less likely to own, while higher-income households buy earlier and at higher rates.

Chart 2: Pseudo person–level homeownership rate by income bucket (percent of AMI) for 30-39 year olds: 2022.

Note: Person-level, weighted estimates using Census microdata. Income is measured as percent of county AMI. Sample restricted to incomes between 25–350% of AMI.

Source: Census and AEI Housing Center.

When affordability deteriorates, it is these income constraints that bind. Some younger households delay buying—but many never buy at all. At the same time, older households who might have become first-time buyers under more favorable conditions are also shut out. The pool of buyers shrinks at multiple ages, leaving the median age largely unchanged.

Evidence from mortgage data reinforces this pattern. First-time buyers today tend to be more financially robust, particularly at younger ages. Borrowers in their late 20s and early 30s have relatively high credit scores and manageable debt burdens, while those who buy later often bring higher incomes or larger down payments. This reflects selection: Financially stronger households enter earlier, while more constrained households delay—or never enter at all.

Table 1: First-time buyer financial characteristics by age cohort: 2018-2024.

Note: Red cells indicate the highest value in each column.

Source: HMDA and AEI Housing Center.

Importantly, this does not necessarily reflect tighter credit standards. Instead, it reflects a more competitive market shaped by a persistent housing shortage—estimated at roughly 4 to 8 million homes nationwide. When there are fewer homes relative to demand, households with stronger financial profiles are more likely to succeed in buying—and therefore dominate the observed data.

The result is a smaller and more selective pool of first-time buyers. A stable median age can therefore be misleading: it does not signal unchanged conditions, but rather a market that is increasingly excluding more marginal buyers across the board. What appears as stability instead masks a broad erosion in access to homeownership.

The policy implications are straightforward. If the problem is declining purchasing power relative to housing costs, the most effective solutions are to expand incomes and supply—especially at the lower end of the market where first-time buyers enter.

One promising approach to expanding supply is to allow and encourage smaller, more affordable homes. Our estimates suggest that reducing lot sizes can lower price points by 15 to 20 percent, making homeownership accessible to a wider range of households. Several states have begun moving in this direction. The federal government should build on that momentum by incentivizing jurisdictions that expand starter home construction.

Expanding supply is difficult and takes time to produce results. The alternative, stimulating demand, is far easier, but also far less effective. Policies that boost demand without increasing supply are quick to take hold, and are largely capitalized into higher home prices, doing little to improve access while further squeezing marginal buyers. Slowly and steadily expanding supply will lead to a better outcome than a series of demand stimuli.

Housing affordability has deteriorated and continues to do so, even as the age of first-time buyers has remained largely unchanged. The real story is not age—it is how many households have been priced out entirely.