Buying a first home has long been considered a major milestone in achieving the American dream. But for many potential buyers, it’s become more and more difficult to reach that goal.
First-time homebuyers accounted for just 29% of existing-home sales in October, down from 32% a year earlier, according to the National Association of Realtors (NAR). The decline comes as the U.S. housing market slows, with existing-home sales falling to their lowest level in more than 16 years.
Meanwhile, individual investors and second-home buyers are gaining a larger share of the market, raising questions about whether Americans without substantial financial resources are being left behind.
The latest figures highlight a growing challenge for prospective homeowners: Even as housing demand weakens, buying a home remains prohibitively expensive for many households.
First-time homebuyers are losing ground
Existing-home sales fell 5.5% in October to a seasonally adjusted annual rate of 3.75 million, marking their lowest level since August 2010, according to NAR.
Sales were also down 8.8% compared with October 2025.
High mortgage rates and home prices have continued to weigh on prospective buyers, particularly those who haven’t previously owned a home and may have fewer financial resources available for a down payment.
The average 30-year fixed mortgage rate reached 7.33% in October, up from 6.86% in September and 6.25% a year earlier, according to Freddie Mac data cited in NAR’s report.
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That increase can make a huge difference in a household’s monthly housing expenses.
For example, consider someone getting a $400,000 mortgage. At a 6.25% mortgage rate, the principal and interest payment on a 30-year fixed mortgage would be $2,486 per month.
At a 7.33% rate, that payment would increase to approximately $2,776.
That’s an additional $290 per month, or $3,480 per year, before accounting for property taxes, homeowners insurance, and other expenses.
For someone already stretching their budget to purchase a first home, that difference could be enough to delay the decision.
Investors and cash buyers are gaining ground
While first-time buyers are losing market share, other groups are maintaining a stronger presence in the housing market.
Individual investors and second-home buyers accounted for 20% of existing-home purchases in October, up from 16% a year earlier, according to NAR.
Cash purchases represented 29% of transactions, compared with 27% in September.
These figures suggest that buyers with greater financial flexibility are continuing to participate in a housing market that is increasingly challenging for mortgage-dependent households.
For example, cash buyers don’t have to contend with mortgage interest rates when financing a purchase. Sellers may also prefer cash buyers to ones who need mortgage approval.
However, the data doesn’t necessarily mean investors are directly displacing first-time buyers. It simply illustrates how different groups are participating in the market at different rates.
Home prices aren’t providing much relief
You might expect home prices to decline significantly when home sales fall to such a low level. However, October’s figures tell a different story.
The median existing-home price increased 0.4% year over year to $416,700, marking the 40th consecutive month of annual price increases, according to NAR.
Although the pace of appreciation has slowed, prices remain high enough to create affordability challenges.
Housing inventory also increased modestly. There were 1.59 million existing homes available for sale in October, representing a 4.6% increase from a year earlier.
At the current sales pace, that amounts to a 5.1-month supply of homes, up from 4.4 months in October 2025.
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If more homes were available, buyers could eventually gain additional negotiating power. But more inventory doesn’t automatically make homeownership affordable, especially when mortgage rates and other ownership costs are high.
The regional numbers also reveal significant differences across the country.
Existing-home sales declined 14.5% year over year in the West, compared with an 8.2% decline in the Midwest, an 8% decline in the South, and a 4.1% decline in the Northeast.
The median existing-home price in the West reached $624,300, compared with $324,300 in the Midwest.
For buyers in expensive Western markets, the combination of high home prices and mortgage rates can make entering the housing market especially difficult.
Is homeownership becoming harder to achieve?
The latest NAR report adds to concerns about the long-term affordability of homeownership in the United States.
For prospective first-time buyers, the challenge isn’t simply finding a property they like. They must also save enough for a down payment, qualify for a mortgage, manage monthly payments, and account for expenses that extend beyond the purchase price.
Meanwhile, existing homeowners who purchased properties years ago may have accumulated substantial equity, potentially giving them more flexibility when buying another property.
That difference can create an increasingly difficult environment for people trying to enter the market for the first time.
There may eventually be opportunities for prospective buyers if inventory continues to grow, prices moderate, and mortgage rates decline. But the latest figures suggest that a meaningful improvement in affordability has yet to materialize.
For now, the housing market is sending a troubling message: While homeownership remains an important financial goal for many Americans, getting a foot in the door is becoming increasingly difficult.
