Aged 50 and buying a home? Trend catches Deutsche Bank's eye

[NEW YORK] The vision underpinning the American dream - of fresh-faced young people buying a first home with a white-picket fence - hasn't held up well.

As it has become more difficult for younger generations to get credit, the median age of the US home buyer has climbed to 47, compared with 31 in 1981, Deutsche Bank chief economist Torsten Slok said. Mr Slok in a note cited data released by the National Association of Realtors last month.

"This is driven by an ageing population, affordability, higher student debt levels, and tighter mortgage lending standards for young people and individuals with lower credit scores," Mr Slok said in his note.

Those forces have contributed to lower levels of residential mobility, he added, and flagged an eight-year gain in the median home-buyer age since the financial crisis. The median age hasn't been below 40 since then, when it was 39.

In a subsequent phone conversation, Mr Slok said he was "quite surprised" when he saw the November NAR data. The trend of ageing home buyers speaks to "the broad umbrella of inequality across generations", going well beyond the housing market, he said.

Younger people are having a harder time than older age groups when it comes to four "buckets", according to Mr Slok: Income, accumulating wealth, getting an education and accessing health care and health insurance.

"These things are critical now in the political debate," Mr Slok added. The economic expansion over the past 10 years has "been looking great, but what have the costs been? This is indeed a conversation starter."

Among publicly traded homebuilders, Toll Brothers has the "most exposure to the move-up luxury market - which tend to be older more well-heeled buyers", Bloomberg Intelligence's Drew Reading said.

Mr Reading called the move-up segment a "comparatively weaker part of the market" as builders shift away from it. Demand drivers going forward are more important, he added. That will come from "the younger cohort".

Toll Brothers shares have gained 20 per cent so far this year versus a 56 per cent rally for the S&P Supercomposite Homebuilding Index and a 24 per cent rise for the S&P 500.

BLOOMBERG