The Median Age of First-Time Homebuyers Is 40. When Should You Buy Your First Home?
Are you hoping to buy your first home but feel like you need to save more for a down payment? Are mortgage rates making you hesitate? Does every home you like seem just a little too expensive?
If so, you're not alone.
Recent housing market data shows that buying a first home has become increasingly challenging for many Americans.
But does that mean you should wait for home prices or mortgage rates to come down? Or would it make more sense to start preparing now?
Let's look at what first-time buyers should consider before deciding when to make their move.
First-Time Homebuyers Are Now 40 Years Old, on Average—or Are They?
According to a November 5, 2026, report from the National Association of REALTORS® (NAR), first-time buyers accounted for just 22% of all homebuyers. Their median age was 40, remaining at a record high.
The findings are based on buyers who purchased a primary residence between July 2025 and June 2026.
It's important to understand that 40 is the median age, not the average, and it certainly doesn't mean you need to wait until you're 40 to buy your first home.
Instead, the data highlights how difficult it has become for many people to enter the housing market.
Between paying rent, covering everyday expenses, saving for a down payment, and preparing for mortgage payments, buying a home can feel out of reach. Even a higher salary doesn't necessarily make homeownership easier when housing and living expenses are rising, too.
That's why the right time to buy should depend less on your age and more on your financial situation and long-term plans.
Start With Your Monthly Budget, Not the Home Price
When people begin searching for a home, one of their first questions is usually, "How much house can I afford?"
But there's an even more important question:
"How much can I comfortably afford to spend on housing each month?"
Your monthly housing expenses include more than just your mortgage principal and interest.
You'll also need to account for property taxes, homeowners insurance, homeowners association (HOA) fees when applicable, and ongoing maintenance costs.
This is especially important in Chicago and its suburbs, where two homes with similar purchase prices can have very different monthly expenses because of property taxes or HOA fees.
For example, even if a lender approves you for a $500,000 mortgage, that doesn't necessarily mean borrowing the full amount is the right choice for your household.
Rather than starting with the maximum amount a lender will approve, determine a monthly housing budget that fits comfortably into your lifestyle, then look for homes within that range.
Do You Really Need a 20% Down Payment?
One of the most common misconceptions among first-time buyers is that they must save 20% of the purchase price before they can buy a home.
That's not necessarily true.
According to the same NAR report, the median down payment among first-time buyers was 9%.
That figure reflects what buyers actually put down. It isn't a minimum requirement or a recommendation for everyone.
Your options will depend on factors such as your income, credit profile, loan program, and financial goals.
Let's consider a $400,000 home.
10% down payment: $40,000
20% down payment: $80,000
That's a $40,000 difference in upfront cash.
For some buyers, waiting until they've saved 20% may make sense. For others, buying sooner with a smaller down payment may be the better option.
A smaller down payment generally means a larger loan, and depending on the mortgage program, you may also need to pay private mortgage insurance (PMI).
On the other hand, putting nearly all your savings toward the down payment could leave you short on cash for closing costs, moving expenses, or unexpected repairs after you move in.
The goal isn't simply to make the largest down payment possible.
It's to buy a home while keeping enough financial flexibility for everything that comes afterward.
Your First Home Doesn't Have to Check Every Box
Everyone wants to find a home they love.
A spacious living room, a beautifully updated kitchen, a desirable school district, and a convenient location would be wonderful.
But finding all those features within your budget isn't always realistic.
That's why it helps to separate your must-haves from your nice-to-haves.
For example, if you've been looking exclusively at single-family homes, you might also consider a smaller home or a well-maintained townhome.
On the other hand, certain priorities—such as your commute or your children's school needs—may be harder to compromise on.
It's also important not to choose a home simply because it has a lower asking price. A property that needs significant repairs could require much more cash after closing than you anticipated.
Think beyond square footage and finishes. Consider location, condition, ongoing costs, and how long you expect to live there.
Your Local Market Matters More Than National Headlines
National housing statistics can help explain broader trends, but they don't tell the whole story about the neighborhoods where you want to buy.
The Chicago area is a good example.
In suburbs such as Naperville, Northbrook, and Glenview, homes in desirable school districts may still be in limited supply, particularly within certain price ranges.
At the same time, even within the same community, some homes may offer more room for negotiation depending on their price, condition, and time on the market.
Instead of making your decision based only on national home price forecasts, look at what's actually happening in your preferred neighborhoods.
What have comparable homes recently sold for? How many competing listings are available? Are homes selling quickly, or are sellers making price adjustments?
These local details can be far more useful when deciding what to offer and when to buy.
Mortgage rates are another important consideration, but waiting indefinitely for lower rates isn't necessarily the best strategy.
Mortgage rates respond to several factors, including inflation, long-term Treasury yields, and broader economic conditions. Their future direction is difficult to predict.
It's also risky to stretch your budget today based on the assumption that you'll be able to refinance at a lower rate later.
Before buying, make sure the mortgage terms available to you today are manageable for your household.
What Does This Mean for Home Sellers?
The challenges facing first-time buyers are worth understanding if you're planning to sell your home.
For many first-time buyers, saving for a down payment and covering closing costs already requires significant financial preparation.
If a home also needs expensive repairs immediately after closing, that additional expense could make buyers hesitant.
Sellers can help address these concerns by identifying important maintenance issues ahead of time and clearly communicating the home's condition, improvements, and features.
Understanding what buyers can comfortably afford—not just the asking price, but also the costs of owning the home—can help sellers develop a more effective pricing and marketing strategy.
So, When Should You Start Preparing to Buy Your First Home?
Hearing that the median first-time homebuyer is now 40 might make homeownership feel farther away than ever.
But there's no reason to assume you need to wait until that age.
And there's no reason to rush simply because your friends or coworkers have already purchased homes.
The best place to start is with your own numbers.
Determine how much you can comfortably spend on housing each month, how much cash you have available for a down payment and closing costs, and how much you want to keep in savings after purchasing.
Then speak with a lender about mortgage pre-approval so you can understand your actual financing options.
With that information, you can begin comparing neighborhoods and property types that fit your budget.
You may discover that saving a little longer is the smartest choice. Or you may find that you're closer to being ready than you thought.
The key is to understand your options based on today's numbers rather than waiting for the market to become perfectly favorable.
If you're considering buying your first home or planning a move in Chicago or the surrounding suburbs, I'd be happy to help.
We can explore neighborhoods, compare available homes, and develop a plan that fits your budget and long-term goals.
Sang Han
773-717-2227
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