The median age of first-time homebuyers continues to climb, reaching 40 years old in 2025, up from 38 in 2024 and 36 in 2022, according to a Marcus & Millichap analysis. By comparison, from 1993 to 2018, the median age ranged from 30 to 32. This shift reflects the growing challenge younger adults face in entering the housing market and has helped sustain demand for multifamily rental housing.
Elevated interest rates and rising home prices are key drivers of the trend. The average fixed rate on a 30-year mortgage was 6.3%, as of mid-November, compared with a historical mean of 3.5% to 5% from 2011 to 2020. At the same time, the median single-family home price has climbed to about $421,000 in 2025, up from $283,000 in January 2020.
The recent housing surge in early 2021, spurred by mortgage rates dropping to 2.7%, briefly encouraged Millennials in their 30s to buy homes. Home sales peaked at 5.8 million annualized units in late 2020 — a 14-year high — pushing prices sharply upward. However, tighter monetary policy and higher rates cooled the market. Since 2022, after a 40% increase over two years, home prices have risen by only about 5%, reflecting a stabilization phase.
Affordability remains a major barrier. Freddie Mac estimates that only 28% of U.S. households could qualify for a mortgage on a median-priced home. Monthly mortgage payments for such a home are roughly $1,200 higher than average apartment rents, a gap that few households can bridge.
This affordability gap has boosted multifamily renter retention. Lease renewals remain above 55%, exceeding the long-term average of 49%. Declining construction for both single- and multifamily homes suggests home prices are unlikely to compress significantly, reinforcing near-term rental demand, according to Marcus & Millichap.
Meanwhile, lower home sales have affected home-related retail products, which account for roughly 7% of total retail sales. Inflation-adjusted sales for these products peaked in early 2021 and have since fallen more than 20%.
Despite these challenges, retail real estate tied to housing demand has remained resilient. Vacancy at lifestyle and power centers stood at just 4.7% in the third quarter, aligning with rates for grocery-anchored centers, unanchored centers and single-tenant assets, said Marcus & Millichap.
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