The home-buying landscape in the U.S. is sharply divided. On one side: the share of first-time homebuyers is at its lowest point ever. On the other: cash buyers are at an all-time high. The dynamics are shifting, and they’re creating challenges and opportunities for prospective homebuyers.
What the Data Shows
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According to the NAR’s 2025 Profile of Home Buyers and Sellers (covering purchases from July 2024 through June 2025), the share of first-time homebuyers dropped to 21 % of all home purchases. That’s the lowest level recorded since the survey began in 1981.
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At the same time, the median age of first-time homebuyers rose to 40 years old, another record high, up from the late 20s in the 1980s.
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Meanwhile, 26 % of buyers paid in cash for their home purchase, also the highest share ever recorded in the survey.
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Among repeat buyers, 30 % purchased without financing (i.e., paid in cash).
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Homeowners are staying put longer than ever: the median number of years sellers lived in their home before selling is 11 years, an all-time high.
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Regarding down payments:
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The median down payment for all buyers rose.
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Repeat buyers’ median down payment was 23 %, the highest since 2003.
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A majority (54 %) of repeat buyers used proceeds from selling their previous home to finance their new purchase. For first-time homebuyers, 59 % used savings.
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Why This Matters for First-Time Homebuyers
The data paints a tough environment for first-time homebuyers:
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With first-time buyers constituting only 21 % of all purchases, they are being squeezed out of the traditional home-buying pipeline.
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The higher median age (40) suggests many are having to delay their purchase, perhaps due to affordability, financing or savings challenges.
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The dominance of cash buyers means that many homes are being snapped up without the complications of financing, and that can reduce inventory and raise competition for financed buyers.
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Longer ownership periods mean fewer homes are on the market; less turnover limits options, which further pressures first-time homebuyers who rely on entry-level homes.
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The higher down payment levels and reliance on home-sale proceeds by repeat buyers mean first-time homebuyers must lean heavily on savings, and may lack the equity or sale-proceeds boost many repeat buyers enjoy.
What First-Time Homebuyers Can Do
Given these headwinds, here are strategic steps for first-time homebuyers:
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Build savings early: Since savings are the primary source of down payment for first-timers, focus on setting aside funds, even small amounts add up.
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Explore alternative paths: Consider shared-equity arrangements, down-payment assistance programs or state/local first-time buyer incentives.
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Target less-competitive segments: With many buyers paying cash and targeting top-tier neighborhoods, first-time buyers may find better opportunity in up-and-coming areas or smaller homes.
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Lock in financing early: Since cash buyers dominate, being pre-approved and ready to act gives financed buyers a stronger chance.
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Be flexible on timing and type: Given rising median age and ownership lengths, first-time homebuyers may benefit from broader property type or location flexibility.
What This Means for California First-Time Homebuyers
In the California market, the challenge for first-time homebuyers is especially acute. Consider:
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A recent state-level analysis indicated that for a "bottom-tier" home in California, monthly payments for a mid-tier home were over $5,500/month in September 2025 — a 74 % increase since January 2020. Bottom-tier homes were over $3,400/month, a 78 % jump.
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With housing costs so elevated, first-time homebuyers in California also face the reality that many homes they might qualify for are well outside conventional affordability metrics.
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While national trends show a first-time buyer share of just 21 %, local buyers in California must contend with even tougher pricing, fewer accessible options, and more competition from investors and high-net-worth buyers.
For first-time homebuyers in Los Angeles, the San Fernando Valley, or anywhere in Southern California, understanding local market dynamics, building a strong financial foundation, and acting decisively when opportunities arise are more crucial than ever.
Strategies for California First-Time Homebuyers & Agents
If you're working with or are a first-time homebuyer in California, here are some strategic considerations:
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Build readiness: Saving aggressively for a larger down payment improves competitiveness. Given the data showing many first-time buyers rely on savings, the better prepared you are, the stronger your position.
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Get financing pre-approved early: With a high share of cash offers in the market, having a clean financing profile, minimal contingencies, and proven pre-approval helps.
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Work with a savvy local agent: Knowledge of local inventory trends is key. For example, in certain Southern California suburbs, investors or all-cash buyers may quickly dominate new listings.
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Explore affordability programs: Given the elevated monthly payment burdens in California markets, consider state or local programs that increase first-time buyer access (e.g., down payment assistance, first-time buyer tax credits).
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Stay flexible and informed: Monitor local inventory and pricing trends. If competition is intense and the share of first-time buyers is dropping, timing, adaptability, and speed can make or break a purchase.
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Educate clients (if you're a real estate agent): Use this market reality to set realistic expectations for first-time homebuyers. Highlight how the national trend of a 21 % share for first-time buyers impacts California and what it means for their buying strategy.
The Big Picture
For the home-buying market overall, the split is sharp: one cohort (repeat buyers, cash-buyers) is leveraging equity and liquidity; the other (first-time homebuyers) is facing more barriers than ever. If you’re a first-time homebuyer, or working with one, it’s a competitive environment. The data underscores the importance of being well-prepared, well-funded, and nimble.
As an advisor in the field, this is a critical moment to help first-time homebuyers understand the landscape, position themselves for success, and navigate a market where they represent a declining share of buyers.
Don't Wait—Position Yourself as a Winning Homebuyer
First-time homebuyers are facing the most competitive market in decades, but the right strategy can give you an edge. If you're serious about buying, now is the time to prepare your financing, understand your local options, and strengthen your offer strategy.
Become a better-prepared homebuyer today. I’ll help you move faster, negotiate smarter, and compete with confidence.
✅ Request a custom homebuyer plan
✅ Get matched with the right loan programs
✅ Start your first-time homebuyer journey now
Source: NAR 2025 Profile of Home Buyers & Sellers
