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For many young Americans, buying a first home is now a dream deferred. The average first-time buyer is 38, up from the historical range of 29 to 33, according to the National Association of Realtors.

“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,” said Jessica Lautz, NAR deputy chief economist and vice president of research.

Meanwhile, existing homeowners use equity to secure dream homes with cash or large down payments.

The aging buyer

Younger buyers have a few factors lined up against them.

Property values of existing homes have risen steadily across the country, making it difficult for new and younger buyers — including many who carry significant student loan debt — to save enough for a down payment. At the same time, higher mortgage rates have increased monthly housing costs, pushing many first-time buyers out of the market.

Then there’s the lack of affordable housing options. Reports show builders are constructing fewer starter homes and more luxury properties, leaving many entry-level buyers with fewer choices. And with sellers holding onto properties for longer due to rising rates, the limited inventory available is snapped up quickly, often at high prices.

Build a plan

Buying a home isn’t just about finding the right property; it’s also about ensuring your financial foundation is solid. Improving your credit score, reducing debt, and building a savings plan can open the door to better loan terms and more favorable interest rates, thus making homeownership more affordable.

Start by working on your credit. Paying down high-interest debt, keeping credit card balances low, and ensuring all bills are paid on time can boost your credit score and increase your loan options.

Many lenders offer lower rates to applicants with higher credit scores, which can make a substantial difference in monthly mortgage payments — and how much you end up paying in interest in the long run. A better credit score is a great way to save yourself thousands over the life of your loan.

Increase your chances

One of the most effective ways to navigate today’s housing market is to expand your search to more affordable areas. Instead of focusing solely on high-demand cities, consider exploring smaller or emerging markets where housing is less expensive and the competition isn’t as fierce.

For remote workers, the flexibility to live farther from traditional business hubs can be an asset. With more companies offering work-from-home options, many buyers have the freedom to prioritize affordability over proximity to an office.

Additionally, some U.S. cities have introduced programs to attract new residents, providing grants or tax breaks that can reduce the cost of buying a home.

Leverage available help

First-time homebuyers can access a range of grants, tax breaks and assistance programs that can make homeownership more attainable. Programs like Federal Housing Administration (FHA) loans, which require as little as 3.5% down, and USDA loans, which offer zero-down options in rural areas, open doors for those who might otherwise struggle with the upfront costs.

Beyond federal programs, many states also provide grants specifically for first-time buyers, helping to reduce the financial burden of down payments and closing costs. Some employers offer home-buying assistance or have partnerships with lenders that provide discounted mortgage rates.

The more money you have saved up, the easier it’ll be to buy a home. Don’t just leave your house fund sitting in your checking account, though. You can make your money do a little work for you by sticking it in a high-yield savings account. And to help keep you on track, you might consider setting up an automatic monthly transfer to your savings account.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.