Why is the number of first-time US homebuyers at a generational low?
A cornerstone of the American dream is drifting out of reach.The estimated number of first-time homebuyers in the US dropped to a little more than 1.1 million in 2024, according to data from the National Association of Realtors shared with the Guardian: the lowest level since the NAR started tracking new buyers, in 1989.Economic instability is keeping the housing market at a standstill, with the number of new home owners at its lowest point in three decades.How did we get here?Home prices and mortgage rates remain high years after the peak pandemic housing boom.
It’s unclear when relief will come – and as Donald Trump’s erratic policies on trade and the economy heightens uncertainty, economists fear the consequences may be felt for a generation.For young Americans, holding off on buying a home has become the new norm.Last year, the average age of a first-time homebuyer was 38 years old, a record high, according to the NAR.In the 1980s, the average was in the late 20s.Buying a home later in life typically has ripple effects, according to Daryl Fairweather, chief economist at Redfin.
“It probably means they’re going to be retiring later, because when you buy a home, you’re setting up for a 30-year-mortgage,” she said.“People are finding that they’re going to have to work longer basically to achieve these goals.”The highs and lows of the property market are closely tied to interest rates set by the US Federal Reserve.Interest rates currently sit between 4.25% to 4.
5%, about 1% lower than they were this time last year.But mortgage rates are still above 6.5%, nearly double what they were five years ago.The housing market has felt the strain, with high mortgage rates suppressing the number of people able to buy their first homes.Typically, when demand drops, prices follow.
But even when the number of buyers dropped, prices kept climbing.The median price of a single-family home hit record highs in 2024, and has only continued going up.In May, the median price was $427,800 – up from $357,100 in 2021, when home prices started to climb.At today’s prices, a family would need to earn $126,700 a year to afford monthly payments on an average home purchased in 2024, up from $79,300 annually in 2021, according to a report from the Harvard Joint Center for Housing Studies.Economists say a historically low inventory of existing homes, coupled with sluggish new construction, is keeping prices high.
And potential new homeowners are faced with a dilemma: renting is now significantly cheaper than buying.Analysis from John Burns Research and Consulting found that buying an entry-level home now costs twice as much as renting an apartment, for the first time since 2006.That’s made the current housing market difficult for both buyers and sellers.And sellers are increasingly struggling to find buyers willing to take on higher mortgage rates.Given interest rates’ impact on the housing market, Trump has repeatedly demanded that the Fed lower them.
“You have cost the USA a fortune and continue to do so,” Trump told the central bank’s chair, Jerome Powell, in a handwritten note,But Powell and other Fed officials argue that Trump’s tariffs have created ongoing economic uncertainty, especially around prices,Some consumers say they’ve already seen prices rise, and cutting rates risks fueling more inflation,“It’s a risk we feel,As the people who are supposed to keep stable prices, we need to manage that risk,” Powell told the US Senate last month.
Few expect marked improvements in the housing market anytime soon.Economists say caution from the Fed will continue to affect the housing market.Buyers, including existing homeowners, are “waiting for interest rates to drop or for prices to correct”, said Fairweather of Redfin.“What we’re hearing is that the overall economic uncertainty makes people not want to commit to a mortgage right now.”
Post Office could hand ownership to staff amid review after Horizon scandal
Ministers are to consider handing over ownership of the Post Office to its operators after the Horizon IT scandal.The Department for Business and Trade (DBT) has published a green paper, starting the first big review of the scandal-plagued organisation in 15 years. The review, which will run until 6 October, follows the publication last week of the first part of the findings from a two-year public inquiry into the Horizon IT scandal.Ministers said part of the review would include looking at the ownership model of the Post Office, which is ultimately controlled by the government, including the possibility of mutualisation or a BBC-style charter model.Ministers have previously met representatives of post office operators to discuss the possibility of handing ownership to the network branch managers who run its 11,665 outlets
Bank of England governor says jobs slowdown could prompt rate cut; European markets fall after Trump tariff threat – as it happened
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Musk’s giant Tesla factory casts shadow on lives in a quiet corner of Germany
Politics of carmaker’s owner has soured sentiments in Grünheide, south-east of Berlin, where the factory promised jobs and revitalisationWhen Elon Musk advised Germans to vote for the far-right Alternative für Deutschland (AfD) in elections last year, Manu Hoyer – who lives in the small town where the billionaire had built Tesla’s European production hub – wrote to the state premier to complain.“How can you do business with someone who supports rightwing extremism?” she asked Dietmar Woidke, the Social Democrat leader of the eastern state of Brandenburg, who had backed the setting up of the Tesla Giga factory in Grünheide.Hoyer said that in Woidke’s “disappointing, but predictable” answer, he denied the charge. “He said he didn’t know him personally. As if that excused him
An AI-generated band got 1m plays on Spotify. Now music insiders say listeners should be warned
They went viral, amassing more than 1m streams on Spotify in a matter of weeks, but it later emerged that hot new band the Velvet Sundown were AI-generated – right down to their music, promotional images and backstory.The episode has triggered a debate about authenticity, with music industry insiders saying streaming sites should be legally obliged to tag music created by AI-generated acts so consumers can make informed decisions about what they are listening to.Initially, the “band”, described as “a synthetic music project guided by human creative direction”, denied they were an AI creation, and released two albums in June called Floating On Echoes and Dust And Silence, which were similar to the country folk of Crosby, Stills, Nash & Young.Things became more complicated when someone describing himself as an “adjunct” member told reporters that the Velvet Sundown had used the generative AI platform Suno in the creation of their songs, and that the project was an “art hoax”.The band’s official social media channels denied this and said the group’s identity was being “hijacked”, before releasing a statement confirming that the group was an AI creation and was “Not quite human
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England beat India by 22 runs in Lord’s thriller: third men’s cricket Test, day five – live
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