Here’s why buying a ‘money pit’ at 30 beats waiting for the perfect home at 40

When Amanda and Vincent DeRise went to view a 140-year-old Victorian home for sale in Atlantic Highlands, NJ, their real estate agent didn’t mince words: It was a “money pit.”

But the DeRises saw a way into the wealth engine that has defined middle-class America for generations.

While it’s no secret that homeownership builds wealth through equity and appreciation, new research from Realtor.com® reveals a critical factor: timing.

At 31 and 32, the DeRises were in a race against the clock to lock in home equity gains that could net them a 22.5% higher net worth by the age of 50—the equivalent of $119,000—than if they had waited to buy in their 40s.

“This data really does show that buying a home can be an accelerator for your net worth,” explains Hannah Jones, Realtor.com senior economic research analyst and author of the report.

But today, that early-buyer edge is running headlong into high costs in a highly competitive landscape that’s edging out younger house hunters.

That’s what led the DeRises to the century-old fixer-upper. After touring homes that needed less work, Vincent says they quickly realized the market was tilted toward cash and speed.

“We were getting beat out by contractors and folks that were offering cash, or offering like $100,000 over asking price,” he says. 

That tension—between the wealth boost of buying early and the shrinking ability to do it—now sits at the center of the American housing story. 

In a series of new interviews, Realtor.com has spoken to families across the country who describe what it takes to get a foot in the door, what happens when they can’t, and the ripple effect of those gaps across generations. 

Why ‘buying early’ is disappearing

In 1990, the typical American bought their first home at age 30. By 2026, the median age of the first-time buyer is 40, according to research from the National Association of Realtors®.

It’s a challenge that Jackie Lam, a freelance writer and an accredited financial counselor who rents outside Pasadena, CA, knows well.

Lam has been a renter her entire adult life. Despite getting pre-approved for a mortgage a few years ago, she found the market nearly impenetrable. 

“It’s just really, really hard,” she says, noting that her options were limited to small condos—a far cry from the three-bedroom starter homes of previous generations.

The ratio of home prices to incomes today helps explain that squeeze.

In 1990, the median home price was $96,800 and the median household income was $31,000—a price-to-income ratio of about 3.1, according to a Realtor.com analysis of NAR and US Census Bureau data. Today, the median home price is $418,000 and the median household income is $85,000—pushing that ratio to 4.9.

With a higher threshold to entry, it’s harder for younger buyers to break through. While the DeRises managed to buck the trend, they did so only by purchasing a house that needed major work.

“We were really naive. A lot of money, a lot of time, a lot of sacrifices,” says Vincent of their choice.

Since closing on their home in October 2024 for $550,000, they’ve put $175,000 into renovations—all self-funded and not including the cost of months of decision fatigue, disrupted routines, and the constant thrum of construction.

The homeownership head start that carries across generations

It wasn’t always this way. Most baby boomers already owned homes by age 30. Yet, among millennials at 30, the share was closer to 42%, according to research from the economics team at Realtor.com.

Part of it is simple math. In 1990, it took 3.2 years to save for the typical first-time down payment at the prevailing savings rate. Today, it takes 9.7 years.

The economics team also found that children raised in homeowner households are 18.4 percentage points more likely to become homeowners by age 35—an edge that can compound when parents’ equity becomes the bridge that makes the first purchase possible.

“Generational wealth and homeownership is relatively sticky,” says Jones. “If your parents are homeowners, you’re more likely to buy a home earlier.”

It’s something Arran Skinner, a digital media and communications professional based in Peekskill, NY, has experienced firsthand. 

In summer 2018, Skinner (then 42) and his wife began house hunting after their first child was born. Even before the COVID-19 pandemic-era run-up in prices, he says he was stunned by what homes cost. 

After crunching the numbers and coming up short, Skinner turned to his dad for ideas—never expecting him to offer financial assistance. But that’s exactly what he did, pulling equity out of his own home in the UK for Skinner and his wife to put toward their down payment.

Technically, Skinner missed the compounding window that would maximize his family’s net worth by 50. But that early transfer has meant stability in tough times.

After Skinner was laid off from his job, he says his family was in a “very precarious” financial situation. To bring in extra income, they started renting out their home on Airbnb.

“It’s been good that we have the house because we were able to use it as an income property for a year,” he says. 

Now, his family is looking to move, and Skinner says they plan to use their home equity to buy in a better school district for their son.

Why buying later is still worth it 

His story points to another reality of today’s market: The compounding window may be shorter if you buy at an older age, but owning provides a foothold that renters don’t get. 

Sindhu Nair, 46, is proof.

Nair, a digital product manager, came close to buying in 2021, only to have the deal collapse on closing day.

“I was devastated,” she says.

So Nair returned to renting, before having a moment of clarity.

“I would pay my landlord through Cash App, and I saw how much I was paying in rent, and decided, ‘No, that’s money that I could have been putting towards a house.’”

Buying in your early 40s is associated with only a 1.5% (about $8,000) net-worth edge compared with buying in your late 40s or early 50s, but homeowners have roughly 38 times the net worth of renters, according to the Federal Reserve’s Survey of Consumer Finances.

By the time Nair returned to the market last summer, mortgage rates were higher than they’d been when she first tried to buy. But waiting for a perfect rate felt like a trap.

“Interest rates hopefully will drop, and I can refinance that,” she says. “That’s not a deterrent for buying a house.”

Jones agrees: “The data is very convincing. If you’re on the fence and you really can swing it, we do see that buying a home can really accelerate your net worth long term.”

In August 2025, Nair closed on a three-bedroom rowhouse in the Port Richmond neighborhood of Philadelphia for $325,000 with 3.5% down.

And now, she’s building equity instead of paying rent indefinitely.

Who gets to own the future

The American housing story has historically had a tidy ending: Buy a home, build equity, pass it on. And it remains the primary engine for intergenerational mobility, with homeowners 1.3 times more likely than renters to anticipate leaving assets to the next generation.

But as the buy-early bonus slips out of reach, it risks destabilizing the very foundation of middle-class wealth. It’s a shift that Skinner thinks about often for his kids.

“At the moment, I don’t have any wealth to transfer, so they’re screwed,” he says. “I really do worry about that.”

Yet, the families who have managed to break through suggest that while it’s harder to unlock the door to homeownership, it’s not impossible.

For the DeRises, the key was sweat equity. For Nair, it was persistence through a collapsed deal and rising rates. Even Lam has found relief, focusing on planning for renting in retirement until her circumstances or income shifts.

Jones is perhaps the most optimistic.

“We know that younger generations want to [become homeowners],” she says. “You know that it’s valuable. We know that it’s valuable.”

The question, she says, is “How do we bridge that gap and help younger households get there?”