Longstanding housing supply shortages across the U.S. erode first-time homebuyers’ ability to enter the market by increasing competition for available inventory, which helps maintain elevated home prices.
The effects of this supply-demand imbalance are varied.
Homeowners have amassed record levels of home equity, estimated by the Federal Reserve Bank of St. Louis to top $48 trillion as of the fourth quarter of 2024 — $11.5 trillion of which was “tappable” as of the second quarter of 2025, per ICE Mortgage Technology. At the turn of the 21st century, total home equity was just $7.1 trillion.
The average age of first-time homebuyers is also rising, with new entrants to the market needing to be wealthier than their parents were when they purchased their first home.
In the 1980s, the average first-time homebuyer was in their late 20s. From 2023 to 2024, the average age rose from 35 to 38, according to the National Association of Realtors. The average age of repeat buyers rose to 61 in 2024 from 58 the year prior, as older owners delayed downsizing.
Homeowners in 2025 are holding onto properties for twice as long as they were before the 2008 financial crisis. The average time between a home’s purchase and its sale stretched to more than eight years last quarter, from roughly four years in late 2004.
However, these homeownership dynamics are on the cusp of a generational shift that may provide gradual relief to younger generations, as older homeowners release tens of millions of homes into the market over the next two decades.
The real estate market analytics and title insurance provider First American Corp. calls this a “generational relay” in a new report examining these tidal changes to homeownership rates and generational housing access.
From 2025 to 2060, the total number of U.S. households is projected to grow approximately 13% to 17.9 million, while the number of homeowner households is expected to climb 8.2% to 8.2 million.
In the near term, millennials and Generation Z buyers will benefit from “late-life moves” by baby boomers driving a compounding, “durable release of inventory,” according to First American.
Aging-in-place trends that have slowed housing turnover, facilitated by medical and technological advancements enabling aging homeowners to live independently longer, will inevitably yield to health, accessibility and family pressures, the report says.
“As older households age out of homeownership, prime, centrally located neighborhoods will reopen to younger families, fueling both demand and opportunity,” notes Sam Williamson, senior economist at First American.
For now, however, homeownership for younger generations has been delayed. The impacts of economic and affordability shocks from the 2008 financial crisis to the COVID-19 pandemic have meant “renting has become the default for longer,” according to the First American report.
Later marriage and child-rearing — key life events that drive the rent-to-own transition — have amplified these trends, a result of younger generations’ heightened focus on education and career development.
First American forecasts boomers’ housing footprint to shrink to 1.5 million households by 2060 after reaching a high-water mark of 39.9 million households, 31.1 million homeowners and a homeownership rate of around 78% in 2025.
At around 35 million households, Generation X follows boomers as a smaller generation entering its peak income-earning years from 2025 to the mid-2040s, forecasted to grow its homeownership rate to around 75% by 2040, at which point they will shift to net sellers.
The so-called “great housing handoff” that First American anticipates represents a long-term supply-demand correction that could ease price pressures on younger buyers.
“Zoom out from the cohort stories and the next 35 years look less like a surge and more like a generational relay,” says Williamson. “By 2060, these cohorts will represent a deep bench of future buyers, extending the generational handoff into the second half of the century.”
