Is the Door Closing on First-Generation Homebuyers?

The first house I owned was a Little Tikes playhouse in the living room of my parents’ rented apartment. It had a kitchen where I fried eggs and brewed tea over a plastic stove. I served meals through a red-trimmed window onto the patio. Indoor/outdoor living—a premium in California’s Bay Area, where we lived.

As I got older, the image of owning a home stuck with me. I got a job and met my husband. We both wanted to own and stay in the Bay Area, where our parents had immigrated and established roots. We dreamed of buying a fixer-upper and not only making it our own, but also a place where our parents could live. Some days that dream wavered as we attended goodbye parties of lifelong friends or coworkers who got priced out—a challenge for us as well. I didn’t have inherited wealth, nor were my parents in a position to help. The whole process seemed overwhelming and out of reach.

The National Association of Realtors’ 2025 annual profile of homebuyers found that "first-time home buyers in the last year shrank to a historic low of just 21 percent of all buyers." An even smaller fraction of that are first-generation homebuyers, like me. Buyers are facing limited housing inventory at high prices coupled with elevated mortgage rates.

The situation has some of its roots in the Covid pandemic, which hit first-generation homebuyers especially hard. "For first-generation homebuyers the impact is dramatic," says Dominic Villa, vice president of business development at Castle Hill Mortgage in Walnut Creek, California. Villa described the prepandemic East Bay real estate market as accessible for both first-time and first-generation homebuyers. He estimated that 80 percent of his business was first-time homebuyers and half of that was first-generation.

"They’re diligent. They saved. They were able to get a price between $500,000 to $700,000 with an interest rate at low fours or high threes. They didn’t have family gifts, and it was a goal of theirs to get their foot in the door with housing. And it was doable," says Villa.

When the pandemic hit, Villa said, he was shocked at how the buyer profile changed. The share of first-generation homebuyers in his business slid below 10 percent, while the number of first-time homebuyers did not change much. "I cannot tell you how surprised I was to see how much generational money was assisting them. There was almost no buyer out there that wasn’t getting some sort of family help." Buyers were submitting multiple offers and overbidding for properties, driving up home prices and making it untenable for first-generation homebuyers to participate.

In 2020, Rita-Soledad Fernández Paulino, a money and self-care coach, started @wealthparatodos on Instagram, where they market financial literacy sessions. Fernández Paulino grew up in Echo Park, a neighborhood in Los Angeles where they lived in a home that had ongoing maintenance issues. At first that put them off the idea of being a homeowner.  "I don’t have to own a property, especially in California, where it’s so expensive," says Fernández Paulino. But their husband thought differently. "My husband, on the other hand, he was the first one in his family to be born in the United States, and he felt like home is financial security," they say.

"When you’re first-generation you build this level of financial security, but you are only one catastrophe away from losing it."

—Rita-Soledad Fernández Paulino

Fernández Paulino and their husband prepared their finances. The couple realized in order to stay near blue-ribbon schools and family, they had to save. Fernández Paulino had been a middle school math teacher, making about $65,000 a year, before going on disability. Their husband, a self-taught software engineer, made about $80,000. So, the two focused on increasing their incomes.

Fernández Paulino started a business, and their husband began a career at a publicly traded company. The couple were able to save almost $500,000. They bought their home, a fixer-upper, in December 2024. Still, Fernández Paulino admits financial peace of mind remains elusive.

" I think something that’s a struggle is, when you’re first-generation, you build this level of financial security, but you are only one catastrophe away from losing it. You have to not only have the means to build it and purchase it and pay for it, but you also have to be your own safety net," says Fernández Paulino.

Andrea Ramos, a money coach, runs the Instagram account @building.gen.wealth and created the "First Gen Home Buyer" podcast series. She says the podcast was based on her conversations with her clients, some of whom are foreseeing their first home as a multigenerational one.

"The thread that I’ve seen with some of my clients is that the home purchase isn’t just about them. They are typically looking for a house to either live in with their parents or use as a house that their parents will retire in," says Ramos. "So typically it’s a conversation about combining finances to see how we as a family unit buy this home."

In researching this story, I found little data on first-generation homebuyers. One reason may be that loan applicants may not have to provide this information. Some federal-backed and state-assistance programs exist for first-generation homebuyers. California’s Dream for All program provides qualified recipients a 20 percent loan for a down payment or closing costs for up to $150,000, which recipients pay back. But critics say this model limits wealth creation because recipients also share a portion of a home’s appreciation with the state. There haven’t been any significant changes in the overall housing market that make things easier for first-generation homebuyers. And without complete data, there’s no way to know if existing programs meet their needs or even how their prospects are playing out.

In 2018, my husband and I bought a fixer-upper with help from his family. During our time in this house, we’ve weathered the pandemic, career changes, and my mother’s passing. We’ve celebrated our wedding, birthdays, and personal milestones, like the day we finished tiling our bathroom. And as we edge closer to complete renovation, there’s comfort in knowing that, so far, our house has been a refuge through life’s ups and downs.

Buying a home now may not create the generational wealth it did in the past. Take a three-bedroom home purchased in San Francisco during the mid-1990s, when the median price was around $300,000. Now, 30 years later, the median price for a single-family home in San Francisco is about $1.3 million, according to Zillow. This soaring appreciation in home values may not happen again in our lifetimes. A home could, though, still be an asset that is passed on. "Creating generational stability is probably the biggest advantage to getting a foot in the door, especially for first-generation homebuyers," says Villa.

The chance to create wealth and stability for themselves and their descendants is enough to get first-generation buyers like me going, whatever the challenges may be.

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This story is from the January/February 2026 issue, which hits newsstands January 13. Read the new issue by subscribing to Dwell.