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Wall Street Journal October 8, 2025 Article on 30 Year Mortgages

Recently the WSJ published an article titled “The Case Against 30-Year Mortgages.” They claim the main obstacle for millennials is “an insidious financial instrument so predatory and deceptive that it has warped the housing market for nearly a century.” The argument is that subsidized credit raises prices.

Keep in mind that in an era of inflation, a 30 year fixed rate mortgage is an instrument which builds financial wealth for the borrower. This is HOW you make it work in your favor. Become educated on amortization schedules. When you have an accurate amortization schedule for your loan, you have a flexible blueprint for reducing the total interest you pay, as well as paying off your loan sooner. But you can always just pay your regular 30 year principal and interest if you have a period of time when you cannot afford to devote extra funds to paying off your loan. If you do devote extra funds to pay down your principal, you have earned the equivalent of your loan’s interest rate on those funds in addition to saving on interest over the life of your loan.

Here’s a link to do the math…

http://calculator.net

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Are You “Location Broke?”

Wait, what? Is there really a state of being “location broke?” YES! There are some states where $10k can buy you what would cost $1M in California, for instance. If you’re constantly feeling broke because you live in a high cost state, my advice is that you could move to a more affordable state (you’re not a tree.) Some people just will not consider a move under any circumstances. Moving is a hassle, but you could gain savings, peace of mind, an easier pace of every day life and tha ability to retire if you do consider it.

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House Flippers Operating on Smaller Margins

Which means that YOU, Mr. & Mrs. Buyer, may not be aware that a home offered for sale may be “a flip.”

You’ll definitely need to have a potential home purchase inspected, even if it’s a new build!!! In flipped properties the flipper may have taken shortcuts & thereby covered up potentially expensive defects. Even flippers are required to disclose known defects when selling properties. Many people just don’t want to remodel a property themselves. You could make yourself some sweat equity though if you are willing to do it right. That means finding a property that needs some work but you could purchase it for less than replacement value. Then take it down to the studs, and do it right. It will pay off when you resell.

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NAR’s Buyer & Seller Trends

The NAR 2025 Buyer & Seller Trends report shows first-time buyers dropped to a record low of 21%, with the median age rising to 40. 
 Overview 

● The share of first-time home buyers dropped to 21%, down from 24% last year. 
● This marks the lowest share since 1981, when NAR began tracking the data. 
● Historically, before the Great Recession, first-time buyers represented about 40% of the market. 
● The median age of first-time buyers increased to 40, up from 38 last year. 
● The median age of all buyers is now 59, while repeat buyers have a median age of 62. 
● Among first-time buyers: ○ 32% were between 25 and 34 years old  ○ 25% were between 35 and 44 years old 

Demographics and Household Composition 

● Married couples: 50% of first-time buyers (unchanged from last year). 
● Single females: 25% of first-time buyers. 
● Unmarried couples: 11% of first-time buyers. 
● Single males: 10% of first-time buyers. 
● Ethnic diversity: ○ 34% of first-time buyers identified as non-White or Hispanic.  ○ 15% of repeat buyers identified as non-White or Hispanic.  ○ Among all buyers: 84% White, 7% Hispanic/Latino, 6% Black/African-American, 4% Asian/Pacific Islander, 3% other. 
● Family composition: ○ 32% of first-time buyers had children under 18 living at home.  ○ 22% of repeat buyers had children under 18 living at home○ 24% of all buyers had children under 18, a historic low. 

Income, Education, and Employment 
● Median household income for first-time buyers: $94,400, down from $97,000 last year. 
● Median household income for repeat buyers: $111,700. 
● Median income for all buyers: $109,000. 
● Married couples had the highest household incomes. 
● Single female buyers had the lowest median incomes of all household types. 
● Among all buyers: ○ 26% held a bachelor’s degree. 
○ 25% held a master’s, law, or MBA-level degree. 
○ 19% had a high school diploma but no college 
○ 18% lived in a household with a veteran. 
○ 1% included an active-duty service member. 

Financing and Down Payments 
● Median down payment for first-time buyers: 10%, the highest since 1989. 
● Median down payment for repeat buyers: 23%. 
● 30% of repeat buyers purchased with all cash. 
● Top funding sources for first-time buyer down payments: ○ Personal savings: 59% 
○ Financial assets (401k, stocks, crypto): 26% 
○ Gifts or loans from family or friends: 22% 

Housing and Living Arrangements 
● 64% of first-time buyers rented their previous home or apartment. 
● 22% lived with friends or family before buying. 
● 65% of all buyers owned their previous home. 
● 14% of all buyers purchased multigenerational homes, down from 17% in 2024. 
● Top reasons for buying a multigenerational home: ○ Caring for aging parents: 41% 
○ Cost savings: 29% 
○ Adult children moving back home: 27% 
○ Grandchildren living in the home: 12% 
○ Reducing childcare costs: 6% 

Motivations for Buying 
● 21% of all buyers said the desire to own a home of their own was their main reason for purchasing. 
● Among first-time buyers, that number rose to 64%. 
● 45% of all buyers said the timing was right and they were ready to purchase. 
● 20% said they had little choice and needed to buy when they did. 
● 16% wanted to be closer to friends or family. 
● 10% wanted a larger home. 


Jessica Lautz, NAR Deputy Chief Economist: 

“The historically low share of first-time buyers underscores the real-world consequences of a housing market starved for affordable inventory. The share of first-time buyers in the market has contracted by 50% since 2007, right before the Great Recession. The implications for the housing market are staggering. Today’s first-time buyers are building less housing wealth and will likely have fewer moves over a lifetime as a result.” 
“Unfolding in the housing market is a tale of two cities. We’re seeing buyers with significant housing equity making larger down payments and all-cash offers, while first-time buyers continue to struggle to enter the market.” 

Shannon McGahn, NAR Executive Vice President: 

“For generations, access to homeownership has been the primary way Americans build wealth and the cornerstone of the American Dream. Delayed or denied homeownership until age 40 instead of 30 can mean losing roughly $150,000 in equity on a typical starter home.” 


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Household Debt

 According to the New York Fed’s Q3 2025 Household Debt and Credit Report, total U.S. household debt rose $197B to $18.59T, with mortgage balances up $137B and credit card debt reaching a record $1.23T. 
 Aggregate Debt and Balances 
● Total household debt increased by $197 billion (1%) in Q3 2025, reaching $18.59 trillion. 
● Debt balances are up $4.44 trillion since the end of 2019. 

Housing Debt 
● Mortgage balances grew by $137 billion to $13.07 trillion. 
● HELOC balances rose by $11 billion to $422 billion, marking the 14th consecutive quarterly increase and standing $105 billion above the Q1 2022 low. 
● There were $512 billion in new mortgage originations in Q3 2025, up from $458 billion in Q2. 
● About 55,000 individuals had new foreclosure notations added to their credit reports, an increase from the prior quarter. 
● HELOC limits rose by $8 billion, continuing the upward trend since 2022. 

Non-Housing Debt 
● Total non-housing balances increased by $49 billion (1.0%) from Q2. 
● Credit card balances rose by $24 billion to $1.23 trillion, up 5.75% year over year. 
● Auto loan balances remained steady at $1.66 trillion. 
● Other consumer balances (retail cards and consumer finance loans) rose by $10 billion to $550 billion. 
● Student loan balances rose by $15 billion to $1.65 trillion. 

Loan Originations and Credit Quality 
● Auto loans and leases totaled $184 billion in new originations, slightly down from $188 billion in Q2. 
● Credit card limits increased by $94 billion (1.8%). 
● Median credit score for new auto loans held steady, while the 10th percentile score increased by 9 points, signaling tighter subprime standards. 
● For mortgages, the median credit score declined by 2 points, and the 10th percentile score fell by 3 points, indicating a slight softening in credit quality. 


Delinquency and Public Records 
● 4.5% of outstanding debt was in some stage of delinquency, 0.1 percentage points higher than Q2 2025. 
● Transition rates into early delinquency were steady across most loan types. 
● Serious delinquency rates (90+ days past due) remained largely stable for auto loans, credit cards, and mortgages, and increased slightly for HELOCs. 
● Student loan delinquencies continued to rise but began stabilizing after resumption of credit reporting. 
● In Q3 2025, 9.4% of student loan debt was 90+ days delinquent, compared to 7.8% in Q1 and 10.2% in Q2. 
● About 141,000 consumers had a bankruptcy notation added to their credit reports, a modest quarterly increase. 


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