The median age of homeowners in the New York City area has risen to an unexpected high, exacerbated by the ongoing housing affordability crisis that is leaving younger buyers sidelined, a recent report indicates.
As 2024 approaches, homeowners in the metropolitan area of New York City, Newark, and Jersey City are, on average, 58.8 years old—just a few years shy of needing Social Security. This information was shared earlier this month by the National Association of Realtors (NAR).
This marks an increase of 4.4 years since 2010, when the average homeowner was younger. I mean, it’s striking, right?
Interestingly, the homeownership rate has remained fairly stable over this period, although it did decrease slightly from 52.7% in 2010 to 51.3% in 2024.
“People keep saying, ‘The housing market is frozen,’” said Vlora Sadie, a former president of the Hudson Gateway Association of Realtors. “I’m not freezing. I’m aging.”
While the overall homeownership rate hasn’t shifted dramatically, the profile of homeowners has changed significantly. Baby boomers seem to be sticking with their homes longer, while younger families are waiting longer to buy. Makes you think, doesn’t it?
NAR’s research highlights that homeownership among younger age groups—specifically those aged 25 to 34 and those 34 to 64—is declining, with the one segment trending upward being older households, aged 65 and up.
Nationally, the median age of first-time homebuyers is now 40, compared to 38 in 2020, marking a significant shift.
“Affordability is definitely a big hurdle,” Sadie noted, referencing high interest rates, persistent inflation, and a lack of affordable starter homes in NYC and other regions. “It’s tough to save for a down payment while dealing with high rent.” It’s frustrating just thinking about it.
She elaborated, “When you look at how quickly living costs are rising versus stagnant wages, it just creates a challenging scenario compared to what previous generations faced when they bought their first home.”
The financial demands of homeownership are steep, with families needing to earn around $110,000 annually to afford a typical home—a figure that’s about 29% higher than the current median household income.
There’s been a noticeable decline from 2010, when first-time buyers’ incomes were approximately 15% higher than necessary for purchasing an average starter home, according to NAR. That’s quite the change.
“There’s a complete scarcity of housing,” Segedi commented. “Over the last decade, many new constructions have leaned toward larger, more expensive homes, limiting available starter options and complicating things for first-time buyers.”
Housing advocates argue that the shortage of affordable homes and a low rate of construction are significant roadblocks for younger buyers, especially with consumer goods still pricey.
Former President Trump made several announcements targeting the housing price crisis, including initiatives like a $200 billion mortgage bond and restrictions on large investors purchasing homes.
Economists have raised alarms about potential inflation spikes due to geopolitical tensions, particularly with Iran, which might worsen the current economic climate.
Additionally, older homeowners are generally not moving out of their family residences as expected. Analysts had predicted a wave of baby boomers selling their homes as they retire, but that hasn’t materialized.
One issue is that the capital gains tax exemption seems outdated. The Taxpayer Relief Act of 1997 allows single filers to exempt capital gains up to $250,000 on home sales, and married couples up to $500,000.
Advocates are pushing for updated tax exemptions, suggesting new caps of $500,000 for individuals and $1 million for couples.
“If you bought something in 1997, it feels vintage now, yet we still use those numbers as a basis for capital gains,” she remarked, capturing a sentiment many might feel.
Homeowners who currently enjoy low interest rates are also hesitant to sell and take on newer, higher rates—like the 6.11% rate from last week. “It’s really tough to persuade someone with a 3% rate to switch to 7%,” Sedgidi stated.
As a possible solution, some propose a down payment savings program for first-time buyers, similar to tax-free accounts, which might make ownership more feasible for younger individuals.
Meanwhile, it seems increasing numbers of young residents are likely to leave New York City and other vibrant metropolitan areas due to the housing affordability issue. “They reroute to the northern suburbs, New Jersey, Connecticut—anywhere they can find a city and afford to buy,” Sedgidi observed.
“Owning a home is a key part of the American dream. If your rent is as high as a mortgage, it only makes sense to go for the latter,” she added.
This trend of aging homeowners isn’t just confined to New York; similar patterns are emerging in various metropolitan areas. For instance, the typical homeowner in Los Angeles is expected to be 59 by 2024, a rise from 54 in 2010. In Boston, the age has climbed from 53 to 57.
