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First-Time Home Buyer Affordability Data — Q3 2025

There were marginal improvements in home affordability in the third quarter of 2025.

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Published · 2 min read
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Written by 
Economist & Spokesperson
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Edited by 
Senior Writer & Content Strategist

With interest rates high and prices out of reach in many markets, the median age for first-time home buyers rose to 40 in 2025, an all-time high, according to the National Association of Realtors. But during the third quarter of the year, price growth moderated slightly and inventory rose. These subtle changes marginally improved conditions for would-be buyers.

Note: This analysis is updated quarterly. If you’re a member of the media and would like to discuss these findings and what they mean for potential buyers, please reach out to [email protected] to be put in touch with the author of this report or one of our other subject matter experts.

Key Findings

List prices were relatively stable in the third quarter.

  • List prices fell 2% in the third quarter to $432,600, on average, nationwide.

  • This puts the typical monthly payment for first-time home buyers at around $3,300, assuming a 10% down payment (the average for this group of buyers). 

  • Among the 50 most populous metros, prices fell furthest in a couple of the traditionally most costly markets: Los Angeles (-7%) and Boston (-7%). 

Inventory, or the typical number of homes on the market during the month, continued to rise in the third quarter.

  • National inventory rose 7% quarter over quarter, and is up 21% compared to the same period last year.

  • Four midwestern metros saw inventory rise 25% or more over the quarter: Columbus (+25%), Detroit (+26%), Cincinnati (+27%) and Indianapolis (+27%).

Third quarter data

The number of active listings plays a big role in whether buyers will find a home that suits their needs.

» MORE: Your How-To Guide For Buying a Home in 2025

How much you pay for a home depends significantly on where you buy. Pricing and competition varies across the U.S.

» MORE: Loans and Programs for First-Time Home Buyers

A home’s price is only part of the equation when determining monthly affordability — housing payments also generally include homeowners insurance, real estate taxes and private mortgage insurance if your down payment is less than 20%.

Q3 2025 FTHB data

» CALCULATOR: How Much House Can I Afford?

METHODOLOGY

Monthly median list price and list count figures are from monthly inventory data from the Realtor.com residential listings database as of Aug. 12, 2025. All nominal list prices were adjusted to June 2025 dollars using the U.S. Bureau of Labor Statistics’ consumer price index. All monthly median figures were compiled into quarterly averages.

The median age of first-time home buyers is 38, according to the National Association of Realtors’ 2024 Profile of Home Buyers and Sellers. Estimated income for first-time home buyers was derived from the U.S. Census Bureau’s 2023 American Community Survey metro-level median household income for householders ages 25-44 — the range likely to include most first-time home buyers — and adjusted to June 2025 dollars using the Bureau of Labor Statistics’ Employment Cost Index.

Homeowners insurance premiums were estimated using a sample policy profile across all markets through Quadrant Information Services.

Additional sources for this analysis include: population estimates and median real estate taxes from the American Community Survey, U.S. Census Bureau and the average Q2 rates on 30-year fixed mortgages, Freddie Mac Primary Mortgage Market Survey.

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