Recent First-Time Homebuying Trends in New York State

New York, Real Estate
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First-time homebuyers play a crucial role in New York’s housing market. In recent years, however, they have faced steep challenges. New York State’s homeownership rate is the lowest in the nation – only about 54%, well below the ~66% U.S. average. High prices, limited supply, and fierce competition have made it tough for renters to become owners. According to the New York Fed, first-time buyers (FTBs) in 2023 accounted for just 24% of home sales, down from 32% the year before and the lowest share since data collection began in 1981.

The typical first-time buyer’s age has climbed into the late 30s (around 38 years old in recent data), reflecting how people are buying their first homes later in life. Despite these hurdles, first-time purchasers remain persistent and even showed resilience through the pandemic years.

Regional Price Disparities

Houses in The Bronx
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New York’s market is diverse, from New York City’s pricey co-ops to upstate’s suburban single-family homes. Statewide, the median home price stood around $382,500 in 2023, but this masks huge regional differences. In New York City, the median sales price was roughly $764,000 in 2023 – about double the statewide figure – whereas homes in many upstate counties often sell for far less.

Affordability is a top concern for first-time buyers, who typically have lower incomes and savings than repeat buyers. Nationally, recent first-time buyers reported a median household income just under $100,000, and many struggle to save the recommended down payment. In fact, most New York first-timers put down only about 5–10% of the purchase price, often utilizing loans with low down-payment requirements.

What First-Time Buyers Are Purchasing

condominium The Bronx
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Property Types

The types of homes first-time buyers choose in New York vary by region. Statewide (and nationally), the vast majority of buyers purchase detached single-family houses – roughly three-quarters of all recent home purchases are stand-alone houses. First-time buyers in upstate and suburban New York typically follow this pattern, buying starter single-family homes with a yard.

In New York City and some metro areas, many first-time buyers opt for apartments. Co-operative apartments (co-ops) and condominiums are common starter homes in NYC. In fact, co-ops make up about 74% of Manhattan’s apartment stock, providing a large inventory of units that often sell at lower prices than condos. Co-ops are usually 10–40% cheaper than comparable condos in the city, making them attractive to budget-conscious first-timers.

The trade-off is that co-ops have stricter approval processes and financial requirements (a co-op board can reject applicants and often demands higher down payments), which can be daunting for a newcomer to navigate. Even so, entry-level buyers in NYC have been driving co-op sales in recent years as they seek more affordable alternatives to high-priced condos.

Price Ranges

The price range of homes bought by first-time owners spans a wide spectrum in New York. Outside of New York City, many first-timers purchase homes in the low-to-mid six figures. For example, in 2023 the median sale price excluding NYC was about $325,000 – indicating many homes in upstate regions and smaller cities traded in the $250–400K range that year.

By contrast, in New York City and Long Island, first-timers often face prices well above half a million dollars. The overall median in NYC was roughly $764K in 2023, and a typical starter apartment in Manhattan or Brooklyn can easily cost $600,000–$800,000 (or more in prime neighborhoods). Even “bargain” studio and one-bedroom co-ops often hover around the high $200Ks to $500K range depending on the borough.

Location Preferences

Location preferences for first-time buyers often balance affordability with proximity to jobs or family. Many young buyers in the New York City metro area start their search in the outer boroughs and suburbs where prices are a bit lower. Areas like eastern Queens, the Bronx, Staten Island, and parts of Long Island and Westchester see substantial first-time buying activity.

Meanwhile, in upstate New York, first-time homeowners are spread across suburbs of cities like Buffalo, Rochester, Albany, Syracuse, and smaller towns. Here the challenge is less about million-dollar price tags and more about finding quality inventory within budget.

A notable trend in 2020–2021 was an increase in city dwellers buying homes in more rural or small-town parts of New York. The pandemic motivated some first-time buyers to leave dense urban areas and seek space in regions like the Catskills, Hudson Valley, or Adirondacks.

Impact of COVID-19 and Remote Work

COVID New York
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The COVID-19 pandemic upended New York’s real estate market starting in 2020, and first-time buyers felt the effects strongly. When the pandemic hit in spring 2020, the housing market temporarily ground to a halt amid lockdowns. However, by that summer, home sales rebounded sharply as pent-up demand was unleashed.

The Pandemic Housing Boom

What followed was an unprecedented housing boom. Mortgage interest rates plummeted to historic lows (around 3% for a 30-year loan), greatly reducing the cost of borrowing. This windfall drew many renters into the market – in fact, 53% of first-time buyers surveyed said they sped up their home purchase specifically because of the low interest rates available.

Cheap financing meant buyers could afford larger mortgages; in New York, it was observed that the drop in rates from 2019 to 2020 fully offset the rise in home prices, keeping the average monthly payment about the same. First-time buyers suddenly found that a home purchase penciled out better than renting in some cases, especially with rents also dipping in NYC during early 2020.

The “Space Race” and Remote Work

Beyond financing, lifestyle shifts under COVID also spurred first-timers to act. Remote work became widespread, untethering many young professionals from their offices. This led to a “space race” – many people living in tiny city apartments sought larger homes where they could comfortably work from home.

According to Fannie Mae research, the pandemic prompted a notable migration “from smaller housing units in high-density city centers to larger homes in lower-density areas,” and this was “particularly true of first-time homebuyers.” In other words, many New York renters in 2020–2021 opted to buy their first home in the suburbs or countryside, in search of yards and spare rooms for home offices.

The data show first-time buyer activity actually held up well during 2020. Despite worries that high unemployment and economic uncertainty would sideline new buyers, first-timers did not abandon the market – their share of purchase mortgages inched up to about 48.8% in 2020 from 48.2% in 2019, according to New York Fed credit panel data.

Changing Homebuyer Expectations

One interesting trend was first-time buyers upsizing their expectations. Historically, a starter home might be a small condo or cottage. But with remote work and low rates, some first-time buyers skipped the “starter” and went straight for a more spacious long-term home.

The average age of first-time buyers in 2020 was about 36, which suggests many were established professionals who perhaps had higher incomes and savings. These buyers took advantage of the unique conditions: mortgages were cheap, stimulus checks and paused student loans helped some save for down payments, and a desire for more room made buying a house in the suburbs appealing.

Another pandemic-era behavior was purchasing second homes or vacation properties, even among those who had never owned a primary home. With travel restricted and remote work possible, some New Yorkers decided that if they couldn’t enjoy city life, they’d buy a getaway. Nationally, demand for vacation homes skyrocketed – overall second-home purchases were 37% higher in 2020–2021 compared to pre-pandemic levels.

High Interest Rates and Market Shifts (2022–2023)

New York house for sale
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By late 2021 and into 2022, the era of rock-bottom mortgage rates had ended. In an effort to curb inflation, the Federal Reserve hiked rates aggressively, which sent mortgage costs soaring. The average 30-year mortgage rate jumped from around 3% at the end of 2021 to over 7% by late 2022.

The Affordability Challenge

For first-time buyers, this was a game changer. Suddenly, financing a home became much more expensive: the same priced house could carry a monthly payment hundreds of dollars higher than a year prior, purely due to interest. In New York, where home prices were already high, the spike in rates dealt a serious blow to affordability. Many entry-level buyers had to lower their price range or pause their plans altogether.

The immediate effect in 2022 was a cooling of the housing market. Home sales volume dropped sharply as buyer demand pulled back. First-time buyers, in particular, felt the strain. The National Association of Realtors (NAR) survey data showed the first-time buyer share of purchases hit a historic low of just 26% in 2022, suggesting many were getting squeezed out or waiting on the sidelines.

Adaptations to the New Reality

Those who remained in the market had to adjust their strategies. Some buyers opted for cheaper property types (for instance, choosing a co-op apartment instead of a pricier condo to save money). Others downsized their expectations, perhaps shifting from aiming for a three-bedroom house to settling for a smaller two-bedroom home that fit their budget under the new rate environment.

Yet, even as conditions worsened for buyers, there were a few silver linings. First, home prices in some parts of New York stabilized or even dipped slightly by 2023, which offered minor relief. For example, in New York City the median price in 2023 decreased by about 2% compared to the 2021 peak.

Second, the competition landscape shifted: with fewer total buyers in the market, first-timers faced a bit less bidding-war frenzy than during the pandemic boom. By 2023, many move-up buyers were locked in place – homeowners with 3% mortgages were reluctant to sell and lose their low rate (a phenomenon dubbed “housing lock”). This meant the pool of buyers in 2023 skewed more towards those who didn’t already own a home.

Zillow’s research shows that by 2023, 50% of home buyers were first-timers, a jump from only 37% in 2021. The likely reason is that repeat buyers pulled back (not wanting to trade in a cheap mortgage for an expensive one), so first-timers made up a greater portion of the smaller sales volume.

Persistent Inventory Challenges

However, regaining share did not mean an easy road. Inventory of homes for sale remained extremely tight in 2022–2023, which kept prices from falling significantly and meant buyers still had limited choices. New York State’s housing inventory sat near historic lows throughout 2023. This shortage was especially acute in starter-home segments – few owners wanted to list their homes, and new construction of affordable units lagged behind demand.

By late 2023, mortgage rates hit their peak – around 7.8%, the highest in 23 years. This was a brutal capstone to an already challenging period. First-time buyer activity slowed but did not disappear.

The 2022–2023 period tested first-time buyers severely. Many had to delay their purchase or compromise on their plans. Those who did buy often stretched their budgets: by 2023, nearly 90% of renters lacked even a 3.5% down payment for a median-priced home, highlighting how affordability eroded with rising rates.

Regional Differences Across New York

houses in Brooklyn
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New York State’s first-time homebuying trends are not uniform – they vary significantly by region, reflecting the state’s economic and housing diversity.

New York City Metro (Downstate)

In the New York City metropolitan area (which includes the five boroughs, Long Island, and downstate suburbs), first-time buyers contend with the highest prices and often unique property types. In NYC itself, condos and co-ops dominate first-time purchases. Many younger buyers start with a co-op apartment in Manhattan, Brooklyn, or Queens, since co-ops tend to be more plentiful and relatively affordable (with prices often 15–25% lower than condos of similar size).

However, co-ops require board approval and usually at least 20% down, so buyers need to be well-prepared financially. Neighborhoods in the outer boroughs (like Queens and the Bronx) see a lot of first-time activity because they have lower-priced co-ops and small single-family homes.

Upstate Cities and Suburbs

In upstate New York – including cities like Buffalo, Rochester, Syracuse, Albany and their suburbs – first-time buyers benefit from much lower home prices but face other challenges like slower economic growth. Typically, a first-time buyer in these regions can find a single-family starter home for between $150,000 and $300,000, depending on the neighborhood.

Upstate markets saw significant price appreciation during 2020–2022, partly because remote work opened the door for downstate buyers to purchase upstate. Some “Zoom towns” emerged – areas like the Catskills/Hudson Valley or the Finger Lakes became popular for remote workers and second-home buyers, driving up prices by double-digit percentages.

This ironically made it a bit tougher for local first-time buyers in those upstate areas, who now had to compete with cash-rich city transplants. For instance, Greene County (in the Catskills) saw home prices jump nearly 70% over four years through 2021, largely due to influx of NYC buyers.

Demographics of First-Time Buyers

The age of first-time buyers has been rising. A decade ago, the typical first-time buyer in the U.S. was in their early 30s; now it’s closer to late 30s. In New York, high housing costs often mean people wait longer to buy, so ages tend to skew a bit higher. Nationally in 2023, the average first-time buyer was about 35 years old. NAR reported the median age jumped to 36 in 2022 and 35 in 2023 as younger millennials finally entered the market in greater numbers.

However, by 2024 the median first-timer age spiked to 38, indicating a mix of older buyers (perhaps those who delayed during the pandemic or who needed longer to save up). New York likely follows this pattern: many buyers are in their 30s and even 40s when purchasing their first home.

In terms of household composition, a majority of first-time buyers are couples. Nationwide, about 62% of recent home buyers were married couples, and first-time buyers often purchase with a partner to combine incomes. However, a significant share of first-time buyers are single individuals. NAR data shows single females account for about 20% of recent buyers, and single males about 8%.

Income is a critical demographic factor. First-time buyers typically earn less than repeat buyers but still need a solid income to afford New York housing. Nationally, recent first-time buyers had a median household income around $95,000. In New York, particularly downstate, incomes often must be higher due to costs.

One notable trend is the increasing reliance on help to buy that first home. Given high prices, many New York first-time buyers get financial assistance from family or first-time buyer programs. The NYC HomeFirst program provides up to $100,000 in down payment or closing cost assistance for qualifying first-time buyers in the city. Statewide, the SONYMA (State of NY Mortgage Agency) offers special low-interest loans and down payment assistance to first-timers, helping remove some hurdles.

Role of Policies and Assistance Programs

Government policies and programs have significant influence on first-time homebuyers, and in New York there have been several initiatives aimed at helping new buyers between 2019 and 2023. At the federal level, interest rate policy by the Federal Reserve indirectly had the largest impact – the Fed’s rate cuts in 2020 lowered mortgage rates and boosted buying power, while its rate hikes in 2022 had the opposite effect.

Down Payment Assistance Programs

One concrete program is the HomeFirst Down Payment Assistance Program in New York City, which offers up to $100,000 toward down payment/closing costs for eligible first-time buyers in the city. This program helped many lower-income buyers (below 80% of area median income) purchase homes by bridging the gap for upfront costs.

Similarly, the State of New York Mortgage Agency (SONYMA) provides low-interest mortgages with features like down payment assistance loans, which remove some of the financial barriers for first-timers. SONYMA loans often come with down payment grants or forgivable second mortgages to cover closing expenses.

Recent Policy Initiatives

New York lawmakers also proposed new ideas. In 2022–2023, there was a push to establish a First-Time Homebuyer Savings Account program, which would let New Yorkers deposit money into a special savings account for a future home purchase and get state tax advantages.

Another legislative effort came in early 2025 with a bill to exempt first-time buyers from the mortgage recording tax. The mortgage recording tax in NY can add about 1% of the loan amount in closing costs; waiving it for first-timers would save a typical buyer around $5,780 on a $578,000 mortgage.

During the pandemic, broader federal policies indirectly aided first-time buyers. The large stimulus payments in 2020 and 2021, as well as the pause on federal student loan payments, helped some young adults pay down debt or save extra money for a down payment.

Conclusion

First-time homebuyers in New York State navigated a tumultuous five-year span from 2019 through 2023. They weathered a pandemic, seized the opportunity of ultra-low interest rates, shifted their preferences for more space, and then confronted a steep rise in mortgage costs that tested their resolve.

Across the state, these buyers showed adaptability: upsizing their ambitions when remote work allowed, sometimes even purchasing vacation homes first, and then downsizing expectations or getting creative when affordability tightened. By numbers, the first-time buyer share seesawed – reaching historic lows in traditional surveys, yet other data suggest first-timers quietly held their ground and even increased their presence in the mortgage market.

Comparing 2019–2023 with the prior decade reveals a clear shift: buying a first home has become harder and more complex. Affordability worsened as home prices outpaced incomes, and volatility in the market meant first-timers had to time their entry more carefully. Yet, what hasn’t changed is the determination of New Yorkers to own a slice of the American dream in their state.

The first-time homebuying trends in New York from 2019 to 2023 tell a story of resilience amid challenges. These buyers adapted to a fast-changing world, whether by moving to new locales, utilizing historically low rates, or adjusting to high-rate environments by finding creative paths to ownership. Their experiences underscore genuine insights: affordability is the linchpin of homeownership, competition can reshape who gets a home, and life events (like a pandemic) can rapidly shift priorities.

The journey might be tougher now than a decade ago, but as many New Yorkers proved, with perseverance and the right opportunities, that first home is still within reach.

References

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