Mortgage Research Network Podcast

Welcome to the Mortgage Research Network Podcast. We bring you the latest in mortgage and real estate news 3 times a week. The audio is AI generated, but content is fact-checked by me, Tim Lucas, editor of MortgageResearch.com and a former mortgage professional. And with me is Craig Berry, a mortgage originator with 25 years experience. Craig want to know something that really bummed me out? The average first-time homebuyer today is 40 years old - that's a whole decade later than people bought homes in the 1980s.

That's a staggering shift. What's driving such a dramatic change in the timeline?

Well, the numbers from the National Association of Realtors tell quite a story. Only 2% of all home buyers are between 18 and 24 years old, and just 10% are in the 25-34 age group. Compare that to pre-2008, when about 40% of home purchases were made by first-time buyers - now it's dropped to a historic low of 21%.

So we're seeing young adults essentially locked out of the housing market. Where are they living instead?

That's where it gets really interesting. The Harvard Joint Center for Housing Studies found that out of 30.5 million young adults aged 18-24, nearly half - about 15 million - are still living with their parents. Another 2.6 million live with other relatives, and 3 million are in college dorms or similar group living situations.

Hmm... that's quite a departure from the traditional path to independence. How are those who try to live independently managing?

Not well, unfortunately. The unemployment rate for 18-24 year olds is sitting at 10.5% - that's more than three times the national average. And even those who are employed are struggling - two-thirds are earning less than 80% of their area's median income.

You know what really strikes me about these numbers? We're seeing this during what's supposed to be a strong economy.

Exactly right - and that's what makes this so concerning. More than half of young adult households are spending over 30% of their income on housing - that's the threshold for being "cost-burdened." For young adult renters, it's even worse - 58% are cost-burdened, and among very low-income renters, it jumps to an astounding 90%.

That level of financial strain must be creating some serious instability in their lives.

Oh, absolutely - over half of young renters in 2023 had lived in their homes for less than a year. They're caught in this vicious cycle where high rents prevent them from saving for a down payment, and student loan debt just compounds the problem.

What about housing assistance programs? Are they helping at all?

Well, only 9% of young renters receive any housing assistance, compared to 24% of all adult renters with low incomes. And as Harvard points out, these conditions are likely to worsen as economic headwinds intensify.

Looking at the bigger picture, how might this reshape our society going forward?

You know, that's really the crucial question. When you delay homeownership by more than a decade, you're not just pushing back one milestone - you're fundamentally altering the entire trajectory of wealth building. Those 15 years of missed equity and property appreciation can mean hundreds of thousands in lost wealth over a lifetime.

So we're potentially looking at long-term implications for wealth inequality.

Precisely. And it goes beyond just financial impacts. When you have millions of young adults unable to establish independent households, it affects everything from family formation to economic mobility. We're seeing the emergence of what some experts are calling a "delayed adulthood" phenomenon.

That really puts things in perspective about the challenges facing this generation.

And here's what I find most concerning - this isn't just a temporary blip. The traditional markers of adulthood - moving out, buying a home, starting a family - are becoming increasingly out of reach for young people. When 14.8 million young adults are living with their parents, we're not just talking about statistics - we're talking about a fundamental reshaping of the American experience.

So what should we be watching for in the coming years?

Well, I think we need to keep a close eye on several things: housing policy reforms, changes in lending practices, and most importantly, whether this delayed timeline becomes the new normal. Because right now, it's looking less like a temporary adjustment and more like a permanent shift in how future generations will approach housing and independence.