New Yorkers buy homes later in life than Americans in general, and often only buy once.

Buying a home anywhere is a major undertaking — but especially so in New York City, where the typical home costs nearly three times more than the national average, and saving for a down payment takes an average of 10 years longer than elsewhere.

These hardships may explain why 61 percent of New York buyers are purchasing a home for the first time — a far higher share than in the rest of the country and in five other major cities, according to a StreetEasy survey of buyers and homeowners across the five boroughs.

Key Findings

• New York City has a far higher share of first-time home buyers (61 percent) than the United States at large, and a higher share than many major American cities.

• New Yorkers on average are three years older than the typical American when they buy their first home.

• Homes in NYC are nearly three times more expensive than in the rest of the country, and saving for a down payment takes an average of 10 years longer here than elsewhere.

• Starter homes are falling out of favor: In New York, 71 percent of homeowners live in the first home they ever purchased, and stay in their homes for a median of 18 years.

• Today, New Yorkers younger than 44 actually earn more than those older than 44 — the opposite of the situation nationwide — and purchase second homes or investment properties eight years earlier than homeowners nationwide.

StreetEasy’s survey results show that New Yorkers tend to delay their first home purchase. The typical first-time buyer in New York is 37 years old, compared to 34 nationwide. And while Millennials make up 61 percent of first-time buyers in the U.S., they make up only 54 percent of first-time buyers in New York.

New York buyers also prefer not to get a starter home, from which they’ll eventually trade up. Instead, they simply rent longer and buy a home that will suit them long-term. Their situation differs from home buyers nationwide, because New Yorkers buying first homes are highly mobile, and have strong reasons to avoid paying for more housing than is absolutely necessary.

Younger New Yorkers Are Mobile High-Earners

Younger New Yorkers are highly mobile and wait longer to start a family than Americans living elsewhere. With the cost of living in NYC so high, they often favor the flexibility of renting over purchasing an apartment with spare bedrooms in the hope of one day using the extra space for a family.

A large population of younger New Yorkers consists of singles who move from out of state, who are high earners. They often choose to rent studios and 1-bedrooms in the most expensive neighborhoods in Manhattan before settling down to purchase a home.

Saving for a Down Payment in NYC Takes 10 Years Longer

One major reason why New Yorkers wait to buy their first home is the expense. The median price of a home sold in New York City is $637,250, nearly three times the $230,100 national figure.

Using the median incomes of New Yorkers ages 25 to 44, and assuming a savings rate of 10 percent of gross annual income, buyers in New York City would need an extra 10.8 years — or 18.1 years total — to save the customary 20 percent down payment on the median priced home. Nationally, buyers need an average of 7.3 years to save a 20 percent down payment.

Of course, one way to make a first home more affordable is to contribute a smaller down payment. In New York, 25 percent of first-time buyers had the standard 20 percent down payment, while nearly half (45 percent) put down less — typically 10 to 19 percent of the total price of the home.

Of repeat home buyers in NYC, 45 percent paid more than the typical down payment, likely due to equity earned on previous properties, and them having more time to save.

Instead of buying a starter home and trading up, many New Yorkers are renting until they can afford a home they’ll want to stay in long-term. (Getty Images)

Buyers Are Foregoing the Typical Starter Home

The expense of a home, and the time required to save for it, means that many in New York (and nationally) only buy a home once. In New York City, 71 percent of homeowners live in the first home they ever purchased.

Thus, buying a starter home — an entry-level property that is expected to appreciate in value, giving owners the resources for a larger, long-term home — may be a thing of the past. Today, NYC buyers especially tend to rent, enjoying the city’s variety of rental options, until they can afford a home they’ll be happy in permanently.

The typical homeowner in New York City has lived in their home for a median of 18 years, while the typical homeowner nationally has lived in their home for 16 years. On top of that, 60 percent of New York homeowners and 65 percent of national homeowners have no plans to sell their home.

New Yorkers Buy First Homes Later, Second Homes Earlier

New Yorkers purchase their first homes later than residents in the rest of the country, but purchase second homes or investment properties eight years earlier. The median age of a buyer who has owned one or more homes in the past is 44 in New York City, compared to 52 nationwide.

Part of the reason for this is that, unlike in the rest of the country, New Yorkers younger than 44 have a higher median income than New Yorkers older than 44, as well as Americans over 44 generally. According to the 2017 census, the median income of New Yorkers ages 25 to 44 is $70,406, compared to $62,369 for New Yorkers between 45 and 64.

Nationally, the median income for Americans ages 25 to 44 is $62,913. For Americans ages 45 to 64, it’s $69,909.

In most places, older Americans earn more than younger ones. So why is it different in NYC? One explanation may be that many high-earning residents have left the city by age 45, whereas older New Yorkers who earn less cannot as easily afford to leave.

How We Did It

StreetEasy partnered with independent market research firm YouGov to conduct a representative survey that was fielded online in May and June 2018. The survey gathered information from 2,550 residents in all five boroughs. Data was collected through a general market sampling of recent renters, who rented in the past 12 months; inactive renters, who are currently renting and did not move in the past 12 months; buyers and sellers who completed a transaction in NYC in the past 12 months; and homeowners who currently own and did not move in the past 12 months. Quotas based on the U.S. Census were set for age, gender, and education. The data was then weighted to known U.S. Census estimates on age, gender, race and education, to ensure that respondents were representative of the New York City population. The results then underwent substantial internal analysis and review by researchers and economists at Zillow Group and StreetEasy. All national buyer figures cited are based on data from the 2018 Zillow Group Consumer Housing Trends Report, whose surveys were conducted the same way as StreetEasy’s to ensure comparability.

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