Why First-Time Home Buyers Are Older Than Ever in 2025 (and What It Means for Montgomery AL)

Why First-Time Home Buyers Are Older Than Ever in 2025

If it feels like first-time home buyers are older than they used to be — you’re right.
According to the 2025 National Association of REALTORS® report, the median age of first-time buyers has climbed to 40, the highest ever recorded.

Back in the 1980s, that number was in the late 20s. So what’s behind this big shift, and what does it mean for anyone looking to buy a home in Montgomery, Pike Road, Prattville, or Wetumpka Alabama?

Let’s break it down.

Buying a Home Really Is Harder Than It Used to Be

First-time buyers now make up only 21% of all home purchases, the smallest share ever. Meanwhile, repeat buyers — often older, with built-up equity — dominate the market. They’re coming in with cash offers and higher down payments, which makes competition tough for younger buyers.

• Median age of repeat buyers: 62

• Nearly 30% paid all cash

• Median down payment for repeat buyers: 23%

• First-timers averaged 10%, the highest since 1989

That equity gap means local buyers searching homes for sale in Montgomery AL or new construction homes in Pike Road often face strong offers from seasoned homeowners.

Why First-Time Buyers Are Delayed

Affordability is the biggest factor.
Between higher mortgage rates, limited affordable inventory, and rising rent and student loan payments, it takes longer to save for that first down payment.

• Average mortgage rate in 2025: 6.69%

• Starter homes are scarce, especially in areas like East Montgomery or Prattville Alabama

• 59% of first-time buyers used personal savings; 26% tapped 401(k)s or stocks

No wonder the typical buyer in 2025 was 40 years old — it simply takes longer to reach the closing table.

Why Repeat Buyers Have the Advantage

Repeat buyers have benefited from more than a decade of price appreciation across neighborhoods like Deer Creek Montgomery AL and Woodland Creek Pike Road.
They’ve owned their homes for about 11 years before selling, giving them plenty of equity to roll into their next property — sometimes even paying cash.

That experience and equity allow them to move faster, handle multiple offers confidently, and stay flexible in negotiations.

How Montgomery First-Time Buyers Can Still Win

If you’re trying to buy your first home, you’re not out of luck — you just need the right game plan.

1. Use down-payment assistance programs – Many local and state programs help first-time buyers with upfront costs.

2. Ask about creative financing – Some lenders offer temporary rate buydowns or flexible payment structures.

3. Check new construction incentives – Builders near Eastchase Montgomery AL and Pike Road Alabama often offer credits or rate buydowns.

4. Consider multi-generational living – 14% of buyers went this route in 2025 to save on housing and caregiving costs.

5. Work with a local expert – An experienced agent familiar with Montgomery AL real estate can help you compete strategically.

The Bottom Line

The path to homeownership looks different now, but it’s still possible.
Yes, the average first-time buyer is older — but also more prepared and financially secure.

If you’re planning to buy your first home in Montgomery Alabama, reach out to Britt Dowling, a trusted Montgomery AL real estate professional who knows how to help first-time buyers navigate this market with confidence.