NEED TO KNOW

• First-time buyers were just 21% of all home purchases in 2025 — an all-time low since the National Association of Realtors began tracking in 1981. The historical norm is around 40%.
• The median age of first-time buyers hit 40 — a record. Median age was 31 in 1981.
• Almost half of adults aged 18 to 29 live with their parents — a level not seen since the Great Depression, according to Wharton researchers.

WASHINGTON, DC (TDR) — The 2026 housing market did not rebound. It split. According to the National Association of Realtors' Generational Trends report released April 15, baby boomers now make up 42% of all home buyers. First-time buyers are 21%. The starter-home pipeline is broken.

🚨Most Americans can no longer afford to buy a home:A new analysis by the National Association of Home Builders found that 65% of US households CANNOT AFFORD a newly built home at current prices and mortgage rates, meaning housing costs would exceed 28% of their income.This… pic.twitter.com/4R2ak5JPXF

— Global Markets Investor (@GlobalMktObserv) May 7, 2026

The big picture: The housing ladder has lost its bottom rung. People with equity move up. People without it move home.

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• Younger millennials' share of first-time buyers dropped from 71% to 60% in a single year — the largest year-over-year drop of any generation.
• First-time buyers are now putting 10% down, the highest share in nearly 40 years. They have to.
• Cash purchases hit record levels. 30% of repeat buyers paid all cash.
• Delaying homeownership from age 30 to 40 costs about $150,000 in equity on a typical starter home, per NAR.

Why it matters: Wealth-building in America runs through the deed. Lock people out of housing and you lock them out of generational wealth.

• The share of first-time buyers has contracted by 50% since 2007, per NAR Deputy Chief Economist Jessica Lautz.
• Nearly half of adults 18-29 now live with their parents — a level last seen in the 1940s, according to Wharton's Susan Wachter.
• 18% of the U.S. population — 59.7 million people — live in multigenerational households, per Pew. The number has quadrupled since 1971.
• Realtor.com counted nearly 3 million U.S. households with two mothers under one roof — grandparents helping raise grandkids.

Driving the news: The multigen response is now showing up in pricing.

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• The median list price for a multigenerational home hit $709,000 in 2025 — 65% above the $429,900 standard listing.
• Townhome construction has hit its highest level in years, now 18% of single-family construction, up from under 10% a decade ago.
• Multigenerational purchases declined to 14% in 2026 from 17% — meaning fewer families can even afford to buy together. They just stay together in existing homes instead.
• Mortgage rates are projected to ease toward 6%, which NAR says could pull 1.6 million sidelined renters into the market.

What they're saying:

• Jessica Lautz, NAR Deputy Chief Economist: Said the data show "homeownership is a way that many Americans build wealth" — and younger buyers are losing those gains.
• Orphe Divounguy, Zillow Senior Economist: First-time buyers now need "a much higher income than they used to" just to enter the market.
• Susan Wachter, Wharton real estate professor: Told researchers housing affordability reached its lowest point on record between 2000 and 2023.
• Jiayi Xu, Realtor.com economist: Said multigenerational living is now a "common choice" driven by housing and childcare costs.

Yes, but: The market may be loosening — slowly.

• Builders are responding with smaller homes, pushing the new-home premium to record-low levels relative to existing home prices.
• 1 in 2 sellers reduced asking prices four times or more in 2025 — buyers regained leverage.
• Inventory is rising, though it remains roughly 12% below pre-2020 norms, according to Freedom Mortgage analysis.
• Adjustable-rate mortgages are climbing — Bank of America said ARMs now make up 10% of its loan volume, the highest share since 2023.

Between the lines: The narrative blames mortgage rates. The math says otherwise.

• The lock-in effect — homeowners refusing to sell because they have sub-4% mortgages — froze inventory. Both parties enabled this. Quantitative easing inflated asset values. Nobody wants to be the politician who pops it.
• Builders stopped making starter homes years ago because the margins are higher on luxury inventory. Zoning rules that block density made the problem structural. Both parties wrote those rules.
• The "multigenerational living is making a comeback" frame is marketing. It is forced economic compression dressed up as lifestyle. Adults living with their parents at Great Depression rates is not a cultural trend.
• Boomers built a tax and zoning system that protected their housing wealth. The bill is now coming due — paid by the people locked out.

What's next:

• Watch the spring 2026 buying season for whether projected 6% mortgage rates actually pull buyers off the sidelines, or whether prices simply absorb the rate cut.
• The NAR commission settlement is fully active. Buyer-side agent fees are now negotiable, which could lower entry costs for first-time buyers.
• Builder townhome volume — currently 18% of single-family construction — is the metric to track. If that share rises further, the supply pipeline is finally adapting.
• Federal first-time buyer assistance proposals remain stalled in Congress. The political consensus to act on housing has not arrived.

If half of young adults are living with their parents, what exactly is the "American Dream" still selling?

Sources

This report was compiled using reporting from the National Association of Realtors, Marketplace, Newsweek, Pew Research Center, and HousingWire.

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