People are waiting longer than ever to buy a home. Is that a bad thing?

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• The median age of first-time homebuyers has increased to 38, according to the National Association of Realtors.
• High mortgage rates, student loan debt, and rising home prices have kept many young adults from buying a home.
• Waiting to buy can hurt your ability to build wealth. But it can also give you more time to save and get a better deal on a mortgage.

Breaking into the housing market is increasingly difficult for young adults, leading more Americans to wait until their late 30s and beyond to buy a house for the first time.

While waiting a few years or even a few decades to become a homeowner cuts into the wealth-building that often comes with owning a home, there can be benefits to waiting until you're older to buy. It all comes down to what makes the most sense for you. 

The average age of first-time homebuyers has reached an all-time high

From July 2023 to June 2024, the median age of first-time homebuyers was 38 years old, an all-time high, according to the National Association of Realtors. In the 1980s, first-time homebuyers were typically in their late 20s, NAR said. 

"First-time buyers face high home prices, high mortgage interest rates and limited inventory, making them a decade older with significantly higher incomes than previous generations of buyers," Jessica Lautz, NAR's deputy chief economist and vice president of research, said in a press release.

Brett Canna, founder, partner, and private wealth advisor of C3 Wealth Management, a Northwestern Mutual Private Client Group, says that student loans and other types of debt also weigh on younger homebuyers.

"When you're going through that, I think it's really tough to prioritize putting together a down payment and getting ready to actually purchase a home," Canna says.

Benefits of waiting to buy your first home

Because housing affordability is so low, hopeful homebuyers are having to wait longer than ever to buy. But depending on your goals and your lifestyle, waiting is not necessarily a bad thing. 

More time to save and build good credit

Buying a house typically requires a lot of cash and a strong credit history. Having more savings and an excellent credit score can also help you get a better rate on your mortgage, saving you money every month.

"I think feeling really comfortable going into a home purchase, like having built up your savings, can really offer some great peace of mind," Canna says.

Flexibility while you're still early in your career

If you're not ready to settle down in one spot yet and want to be able to move easily if a job requires it, renting might be a better fit for you. Moving is much easier and more affordable for renters, who don't have to worry about selling their homes or paying hefty closing costs before they can move to their next place. 

You don't need to worry about home repairs

If you don't have a lot of money tucked away for unexpected costs, renting might be better for you. Homeownership can come with all kinds of expensive, unexpected costs. As a renter, if something breaks, you can just call your landlord. 

Drawbacks of waiting to buy your first home

You're missing out on building wealth

A 2018 analysis from the Urban Institute found that those who buy younger have much more home equity in their 60s compared to those who waited until their mid-30s or later to buy.

Home equity is the value of your home minus what you owe on it, and it can be an important source of wealth for homeowners. 

"Building equity in a home can be very useful if you're starting to do that in your late 20s, early 30s, by the time you're in your 40s, you may have built up an asset where you have a home equity line of credit secured by it, and that gives you a lot of financial ability to do other things, make investments, start a business, buy a second property," Canna says.

Home prices will continue to rise

Home values generally go up over time. As a homeowner, you'll benefit from these increases since they add to your equity. But if you wait to buy a home, you'll have to deal with higher prices when you decide to buy later on. 

Rent increases over time, but mortgage payments can be fixed

When you rent, your housing costs can go up every time you renew your lease. If you buy a house using a fixed-rate mortgage, your monthly payment will stay the same for the entire time you have your mortgage (though your taxes and insurance can go up over time). 

Homeownership isn't for everyone, and you should only buy when you're ready

There are pros and cons to both buying and renting, and there's no one-size-fits-all answer to whether you should buy or rent.

If you do want to own a home one day but aren't sure how to start preparing, one of the best things you can do now is make sure you have a solid emergency fund set aside. Canna says you should have six months of living expenses saved up in your emergency fund before you start saving for a down payment.

You may also want to see if you qualify for any down payment assistance, either through your state, your mortgage lender, or another entity.

If you don't want to stay in one place for at least five years, homeownership might not be right for you.

"There are costs and there are challenges with owning real estate," Canna says. "And generally you're not going to get to your break-even on your investment until you've been in a property for at least five years."