Homebuyers are getting older as young Americans are being 'pushed out' of the real estate market — here's what stops them from bridging the gap

It's still expensive to buy a home

Young Americans — especially first-time homebuyers — are facing major financial headwinds at the moment that are impeding their foray into real estate.

For one, the cost of borrowing remains high, as mortgage rates stretch beyond the 7% mark.

Meanwhile, sellers are reluctant to relinquish the low rates they locked into in previous years, which has tightened supply.

The NAR says it now takes a household income of $107,000 to afford a typical home, up a record 22% from last year.

To make matters worse, young Americans are grappling with inflated everyday prices ands hefty student loan payments.

"We are pushing out anyone who may be looking for an affordable property," Lautz told Axios.

As a result, it’s folks with more cash on hand or those who have built equity through previous home purchases, when prices and interest rates were lower, that can afford to buy in the current market.

This is a group that tends to skew older, since one typically accumulates more wealth over time.

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There are other options for young Americans

While many younger Americans feel priced out of the current housing market, there are still ways to grow your wealth through real estate investments now to potentially purchase your own pad later on.

You could consider a real estate investment trust (REIT), which is an entity that allows you to earn returns from several properties at a time without owning a single one yourself. They’re similar to a mutual fund, except REITs own and operate properties that produce income, such as apartment buildings and shopping malls.

If you’re an accredited investor with a bit more cash up your sleeve, commercial real estate could be an option. Some firms allow investors to own shares of institutional-quality properties leased by major retailers, including CVS and Whole Foods.

But even if you’re not looking to take a huge chunk out of your paycheck for your investments, some platforms will allow you to invest in rental and vacation properties at a much lower cost.