First-Time Homebuyers Face 45% Higher Mortgage Burden Amid Rising Expectations and 'Soft Saving' Trends

First-time homebuyers in today's market face unprecedented affordability challenges, with a typical buyer in 2024 needing to allocate approximately 45% more of their income to mortgage payments compared to 2019. This comes as a veteran real estate broker observes a growing reluctance among younger generations to purchase traditional "starter homes" that lack extensive features and amenities.

According to a recent analysis by the JPMorgan Chase Institute, nationwide home price indices surged by about 50% between 2019 and 2024, while the 30-year fixed mortgage rate climbed from 3.7% to 6.9%. This combination has effectively doubled monthly mortgage costs, significantly outpacing the 41% nominal income growth for individuals aged 25-44 during the same period. The average age of a first-time homebuyer consequently reached a record high of 38 years old in 2024, as individuals require more time to advance their careers and accumulate sufficient funds.

A real estate broker, Solitary Patriot, with over five decades of experience, voiced a critical perspective on current buyer attitudes. > "Having been a real estate broker for more than 5 decades, I can tell you that today’s first-time buyer is unwilling to buy what we know as a 'starter' house because it doesn’t have all the features and amenities they want," Solitary Patriot stated in a recent social media post. This sentiment aligns with market observations that suggest a disconnect between aspirational home features, often influenced by media, and the practical realities of entry-level properties.

The broker further suggested that discretionary spending habits contribute to the challenge. > "So, they’ll continue to piss their money away on Door Dash, Etsy, and online gaming rather than putting that money into buying and upgrading a starter home," the post continued. Research on Gen Z spending habits, such as that published in the International Journal of Research in Finance and Management (2025), indicates that urban youth often prioritize discretionary expenditures on lifestyle, entertainment, and e-commerce, sometimes at the expense of long-term financial planning. Investopedia also notes a "soft saving" trend, where younger generations prioritize present enjoyment and mental well-being over aggressive saving for the future.

Despite these spending patterns, a Clever Offers survey reveals that 75% of Gen Z attribute their inability to save for a down payment to rising living costs, and 49% feel homeownership is so unattainable that saving seems pointless. While 28% of Gen Z acknowledge their own spending habits as a factor, they also cite expensive homes (47%) and high interest rates (28%) as primary barriers. This challenging landscape has led some younger buyers to consider significant compromises, with 60% willing to purchase fixer-uppers and nearly half open to homes with issues like asbestos or foundation problems out of a desire to achieve homeownership.