At What Age Is It Time to Buy a Home?

It’s legal to buy a house at the age of majority. That special number is 18 years old — with a few exceptions. People reach legal adulthood at 19 in Alabama and Nebraska. And Mississippi residents are late bloomers—they stop being minors at age 21.

Legal majority means you’re old enough to apply for mortgages, sign (or even co-sign) binding contracts, and close real estate deals.

But it usually takes quite a few years after the age of majority to build the credit profile that works for a mortgage.

The Average First-Time Buyer Is Thirty-Something and Rising

Homes are getting more expensive and that means loan approvals are getting harder to reach. No wonder the average first-time buyer is getting older.

The average age of first-time home buyers is 36, according to the National Association of REALTORS®. This is three years older than the average 2021 buyer!

Six in ten millennials lack the money for a down payment on a home. Most do want to buy, but simply can’t save enough, given student loan debt and today’s expensive housing market.

Another factor is the job market. Stable jobs that end in retirement are largely things of the past. People are changing careers, starting up companies, working in a gig economy. The tech sector is laying off workers. All of this means fewer young people ready to settle into one place and commit to a mortgage.

More young people are renting for longer. And we now have corporations, including publicly traded companies, buying up homes so they can make money off the renters.

How can young buyers compete in a market where Wall Street real estate companies keep getting richer—and getting tax breaks?

Reasons to Buy at an Early Age

The earlier if life you become a buyer, the earlier you’ll be paying off a loan. That’s how to build equity — meaning the value of the home shifts from your lender to you. Meanwhile, those steady mortgage payments build your credit up, month by month.

For those who can manage it, homeownership at a young age can be highly advantageous. Over time, an owner builds value in the home. That’s value that can be borrowed against, or that turns into profit through selling.

Along the way, you’re learning how to deal with home expenses — a fine art! And you’ll acquire a sense of stability and community that grows after you’ve put down local roots.

Do you have the credit profile you need, though? And do you know what boosts your score and what brings it down? Should you get a new credit card — or pay off credit card balances you’ve got? Raising your credit score is the key to a mortgage with decent rates and terms.

And be sure you’re prepared for any unexpected changes, with enough cash in reserve. You’ll still need funds after you’ve parted with the down payment, closing costs and fees!             

Reasons to Save for Later

Making the leap from renter to buyer means a lot more tasks to deal with on a continual basis. From handling the grounds maintenance to calling the plumber or replacing that worn-out fridge, now it’s on you.

In any case, if you’re a young person, a commitment to a home makes you less flexible. Older buyers tend to be less drawn to experimentation — in careers, friends, and places they want to be. Would you feel tied down if you had to stay in place for more than five years to make this major investment worthwhile? Then it’s probably best to wait a few years.  

“But a mortgage will be cheaper than rent,” you might say. In many places that’s true. But here’s the rub. You need a strong credit record to convince financial institutions to lend you money to buy a home. And very few people under 30 are in the position to pay for a home with cash.

Building a good credit profile takes years. It’s typically best to wait, earn, and save, until you’re positioned to get a mortgage with terms you can live with. If you’d have to pay close to (or more than) 30% of your monthly income on your mortgage payments, it’s unlikely that a lender is going to say OK to that.

Ready for homeownership but short on funds? One way to afford the down payment and your monthly mortgage costs is getting a roommate, and creating your first deed as a tenancy in common.

Three Signs It’s Time to Buy Your First Home

You might be ready to buy your first home when…

  • Your debt is low and your income is strong.

This tells a lender you’re more of a saver than a spender. (Lenders like that.) If you have heavy student loan debts or a lot of credit card debt without high earnings, you could be denied a mortgage. Not sure? Check with a local mortgage specialist.

  • Your source of income is predictable, and can cover the costs of ownership.

This means you’ll be comfortable paying down the mortgage for years, and can handle the home or condo owner’s insurance premiums, the property taxes, plus routine and urgent maintenance issues that crop up.

When you buy a house, you’ll owe the local treasury a certain amount of property tax on its assessed value. Your lender might establish an escrow account, which you’ll be paying into through your monthly mortgage payment, to set aside the tax funds. Then the mortgage company will submit the taxes for you when they’re due.

Steady income as evidenced by pay stubs makes a loan application easiest — but that’s not absolutely necessary. Self-employed home buyers can qualify for loans.

  • You’ve got the cash for a down payment and closing costs.

Mortgages backed by Freddie Mac or Fannie Mae will need you to pay at least 3% of the home price as a down payment. For an FHA loan, you’ll need to put at least 3.5% down. If you don’t want to pay for private mortgage insurance (PMI), you’ll need to put 20% down.

Summing Things Up: Age Is Just One Factor

Fifty years ago, many people owned homes in their 20s. They were often married by then. Today, most first-time homebuyers are over 30 and a great many are single. Some see no need to rush into a mortgage, and others need more time to save.

In their 30s and older, they have financial track records, and might be more ready to settle down into mortgages.

But age isn’t everything. It’s time to buy a home not just when you can — but when you’re mentally and financially prepared.

Supporting References

Nebraska State Bar Foundation: Reaching the Age of Majority Your Legal Rights and Responsibilities. Age of Majority by State.

Susan Meyer for What Is the Average Age of First-Time Homebuyers (and Why Is It Getting Higher)? (updated March 14, 2023).

Kacie Goff for Bankrate, LLC (a Red Ventures company), via What Is the Minimum Age to Buy a House? (Nov. 2, 2022).

Andrew Dehan for What Age Can You Buy a House? A Legal and Practical Look at the Question (Jan. 11, 2023).

And as linked.

Photo credits: Cottonbro Studio and George Milton, via Pexels.