After years of sitting on the sidelines, younger homebuyers are growing in numbers — and their return could reshape the housing market.
Younger households — those in which the primary mortgage borrower was between 18 and 39 years old — accounted for approximately 44% of new mortgages in the early 2000s. Following the 2007-2011 housing crisis, households in that age group pulled back to as little as 27% in early 2012. That's when established households — those with a primary borrower in the 40-69 age range — expanded from around 54% to nearly 70% of mortgage originations. (Most of the remainder was seniors.)
A healthy housing market shouldn't depend so heavily on older, established households.
Fortunately, the dramatic decline among younger households has reversed entirely in the past 13 years, and the recovery may even be gaining strength recently as lower mortgage interest rates and moderate price growth improve homebuyer affordability, according to a Nov. 5 report by the Federal Reserve Bank of New York.
In the third quarter (July through September) this year, younger households accounted for 44% of new mortgages — the same as in 2000 — while established households had reverted to their historical share and were even slightly lower, at around 50%.
Younger buyers moving confidently into the market
The resurgence of the younger population is especially impressive because the median age of a first-time homebuyer rose to 40, according to the National Association of Realtors. This suggests that a large number of people who would have purchased their first home 15 to 20 years ago are finally doing so, while people younger than them, who were not disrupted by the 2007-11 downturn, are moving into the market.
In short, younger households are recovering to their position as key drivers of the overall housing market. That recovery matters not just for those buyers, but for the rest of us as well.
Most immediately, new homeowners — especially younger ones — tend to buy various home furnishings, which supports the broader economy. Moreover, as home values increase, homeowners can tap their equity to fund other expenditures — like home improvements and even non-housing-related expenses, such as college tuition.
To be sure, over the period from 2014 to the third quarter of 2025, homeowners generally did not draw substantially on their home equity, despite its growth. As a result, homeowners now have almost $590 billion in home equity they haven't tapped. That available credit from owned homes can support continued spending if incomes falter.
The bottom line is encouraging: Most individual households are not financially stretched, and younger households, as a group, have retaken their place as a significant driver of home purchases and related spending.
As long as this continues, the economy and the housing market have strong underlying support.