Following the COVID-19 health crisis, home prices and mortgage rates rose sharply. This created concerns that first-time homebuyers (FTBs) would be disadvantaged and would lose ground. Earlier this year, we documented that the share of purchase mortgages by FTBs, as well as their share of home purchases, have actually increased slightly over the past couple of years. It appears that FTBs are holding their own in this challenging housing market. This raises the question of whether the characteristics of FTBs have changed. In a 2019 post, we described the characteristics of these buyers over the period from 2000 to 2016. In this post, we provide an update through 2024.
Mortgage Size
To transition from renting to owning, a household typically needs to access financing to assist with the purchase. The chart below shows the average origination mortgage balances for FTBs and repeat buyers over time. In each year, there is a positive gap between these balances, with repeat buyers taking out larger mortgages. In 2016, this gap was $59,725. By 2019 it had fallen to $48,593, but on the heels of the health crisis it increased to $70,820 in 2022, subsequently easing to $64,760 by 2024. This widening of the difference in average origination mortgage balances was driven by an increase in relatively large mortgages taken out by repeat buyers. In contrast to the average balance difference, the difference in the median origination mortgage balance was only $36,750 in 2022 and declined to $29,653 in 2024.
Average Origination Mortgage Balance
Note: Amounts reflect nominal dollars, not adjusted for inflation.
Credit Score
The mortgage rate that a household pays depends on the average mortgage rate at the time as well as the credit score of the household. As expected, the average credit score for repeat buyers exceeds that for FTBs. In 2016, repeat buyers had an average credit score of 750, while FTBs had an average score of 714. Both average scores moved up modestly by 2019, to 758 and 718, respectively. During the COVID-19 crisis from 2020 to 2022, the average credit scores for both groups of households moved higher, to 767 and 729, respectively. This upward trend continued over the next two years so that in 2024 the average credit scores were 775 and 734, respectively. Over the twenty-four years covered by the data, average credit scores for repeat buyers rose by 71 points and for FTBs by 64 points.
Average Credit Score at Origination
Note: Credit score reflects Equifax Risk Score 3.0.
Age
A natural question is whether FTBs have had to delay their transition to owning due to the rise in home prices and mortgage rates. In our 2019 post, we showed that the average (median) age of FTBs in 2000 was 37.9 (35) years and that by 2016 it had declined to 35.4 (32) years. By 2019, the average (median) age of FTBs had edged upward to 36.4 (33) years, as shown below. There was little change over the next five years, as the average (median) in 2024 was 36.3 (33) years. And so, despite the financial challenges in transitioning from renting to owning, over the past decade households have managed the transition at essentially the same average age.
Average Age at Time of Home Purchase
Income
Our data does not provide borrower-level income. However, we do know the zip code where the home buyer resides. This information allows us to look at the average adjusted gross income of the zip code using the 2022 IRS tax statistics and to see how this may be changing over time for FTBs and repeat buyers. Note that each zip code is matched to the average income of 2022 for all years, so that any movement over the years represents the relative neighborhood income position of the home buyer, and not the changes in actual zip code income over time.
As the chart below shows, average zip code income declined for both types of buyers during the housing boom of the early 2000s. Following the housing crash, these incomes increased for both types of buyers, peaking in 2012 for repeat buyers and two years later for FTBs. For repeat buyers, average zip code incomes subsequently trended lower until 2019 and then increased sharply over 2020 and 2021. For FTBs, the change in average zip code incomes from 2014 to 2022 was modest, and then from 2022 to 2023 it declined by more than $5,800. This decline could reflect FTBs switching their focus to lower-income neighborhoods as house prices and mortgage rates moved higher.
Average Zip Code Income
Note: Each mortgage is matched to the 2022 average zip code income from IRS statistics, regardless of the year of origination.
Summing Up
First-time homebuyers have been more resilient than many feared in the tight housing market of the past few years. As we documented earlier and above, they have managed to maintain their overall share of purchases without having to delay the transition to homeownership. The continued improvement in FTBs’ credit scores has helped these buyers maintain their access to mortgage credit. One strategy used by FTBs in this difficult market may have been to focus their house search in lower-income zip codes.
Donghoon Lee is an economic research advisor in Consumer Behavior Studies in the Federal Reserve Bank of New York’s Research and Statistics Group.
Joseph Tracy is a Distinguished Fellow at Purdue’s Daniels School of Business and a nonresident senior scholar at the American Enterprise Institute.
How to cite this post:
Donghoon Lee and Joseph Tracy, “Who Is Still on First? An Update of Characteristics of First‑Time Homebuyers,” Federal Reserve Bank of New York Liberty Street Economics, August 11, 2025, https://libertystreeteconomics.newyorkfed.org/2025/08/who-is-still-on-first-an-update-of-characteristics-of-first-time-homebuyers/.
Disclaimer
The views expressed in this post are those of the author(s) and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the author(s).
