First-time home-buyers in the Bay Area seeing the dream of home ownership slipping away

By Kenny Choi

The median age for first-time home-buyers in the U.S. is now 40 years old, just four years after that number was 33 years old, and in the Bay Area, the market for people looking for a starter home is even more daunting.

Realtor David Dupont has sold more than 300 homes in his career, but he sees a very different environment these days for homebuyers and realtors. 

“You can think of the housing market like a staircase.” Dupont said. “In order for the second to be healthy, the first has to be healthy.”  

Dupont spoke as he was getting ready to list one of his client’s homes in San Rafael. The latest Redfin housing data shows the median price of a Marin County home is just over $1.5 million. 

“The best part about this house is the backyard,” said Dupont. 

He acknowledges this house isn’t the kind of “starter home” the vast majority of first-time buyers can afford, and that lack of entry-level supply is problematic.  

“They end up spending a lot of time looking at houses and end up spending a lot of time writing offers and not getting houses. Then they kind of give up,” said Dupont. 

Newly released numbers from the National Association of Realtors show the share of first-time buyers is now just one in five, hitting an all-time low. Jessica Lautz, deputy chief economist and vice president of research, says the implications are “staggering”. 

“It also means more gridlock in the housing market,” Lautz said. “We’re just not seeing movement in the same way that we used to.”

In fact, the NAR says the share of first-time buyers has contracted by 50% since 2007, underscoring a housing market starved for affordable inventory. 

That lack of inventory is a major focal point for the Bay Area Council, a public policy organization advocating for statewide housing reforms.

“With more supply, we’re gonna see more people able to buy homes,” said Bay Area Council senior vice president Louis Mirante. “That’s really critical, especially for the Bay Area, where our housing crisis is defined by an acute shortage of homes.” 

Mirante says more legislative efforts that streamline housing approvals and override restrictive local zoning can move the needle in favor of more first-time buyers. 

But realtors like Dupont aren’t so sure. They understand the reality for so many, still searching for a home.

“People just aren’t feeling confident about buying right now,” said Dupont. 

To offset a lower number of transactions for realtors across the country, Lautz and the NAR say more realtors are diversifying their businesses by turning to property management. 

The association also says buyers with significant housing equity are making larger down payments and all-cash offers, while first-time buyers continue to struggle to enter the market.

The share of homes purchased with all cash also hit an all-time high in the past year, at 26%.