Younger Arizonans are struggling to buy homes, Sen. Gallego says

U.S. Sen. Ruben Gallego says housing prices have climbed too far out of reach for many younger Americans.

Speaking at a Tempe Chamber of Commerce event Tuesday, Gallego noted that the average age of first-time homebuyers in the U.S. is now 40 — the oldest it has ever been.

“For a lot of us young Arizonans, it was not that uncommon for us to buy a house at 25, 26,” Gallego said.

According to data from the National Association of Realtors, the average age of first-time homebuyers had hovered between the late-20s and early-30s since the 1980s. The increase in homebuyers’ ages to the late-30s and now 40 has happened in just the last five years. The sudden shift relates to a lack of housing supply, higher home prices, and higher mortgage interest rates.

Gallego said as younger people struggle to build wealth through homeownership, Gen Z is on track for a difficult economic future.

“This younger generation of Americans, if we don’t really change the course of this country, will be the poorest generation of Americans in the history of the country since the Great Depression,” Gallego said.

Gallego, a Democrat, is sponsoring a bill with Indiana Republican Sen. Todd Young that would raise the amount that first-time homebuyers can take out of their retirement accounts to put toward down payments.

Since 1997, first-time homebuyers have been able to withdraw up to $10,000 from their IRAs without incurring an early withdrawal tax penalty. Gallego and Young say home prices have nearly tripled in the time since, but the cap has not been adjusted. They want to raise the cap to $50,000.