As of late 2025, first-time homebuyers made up just 21% of the real estate market, according to the National Association of Realtors. There’s a reason for that.
In March, the median existing home sold for $408,800, according to NAR. That marks the 33rd consecutive month of annual price increases.
Throw in elevated mortgage rates, and it’s easy to see why first-time buyers may be inclined to sit the market out. Without equity in an existing home to tap, coming up with a down payment alone can be challenging.
But that doesn’t mean today’s first-time homebuyers are doomed. If that’s the category you fall into, you may have a few key things working in your favor.
The New Math: Why Sellers Are Getting Realistic in 2026
While first-time buyers may be facing higher home prices and borrowing rates, they’re also entering a market where sellers are increasingly desperate.
“Homebuyers who are serious and focused have a very good opportunity right now to make a deal with sellers who are now much more realistic,” says Tamar Asken, Realtor and owner of Parasol Realty in Beverly Hills, California. “You may not get the house for cheap, but you may get a better deal overall than you’d have gotten in years past.”
Seller expectations have waned, Asken notes. Now, rather than anticipate bidding wars, many sellers are happy to simply get their asking price.
“In the current market environment, sellers would prefer to find a sincere buyer quickly rather than wait around and still be on the market for several weeks, losing buyer interest to fresher inventory,” she says.
Buyers are also less likely to face competition in today’s market since sellers outnumber them. According to February data from Redfin, there were an estimated 46.3% more sellers than buyers, the largest gap since 2013. That allows first-timers to negotiate concessions or ask for some extras, which, as Asken puts it, “is a nice change from the cutthroat bidding we saw a few years ago.”
Kevin Watson, district manager at Churchill Mortgage, says many first-time buyers are wondering whether to sit tight or make an offer in today’s market. His answer?
“I think now is a great time to buy because there are more sellers than buyers in the market, and whenever demand is less than supply, it’s a win for prospective buyers.”
Watson says he’s also seeing sellers willing to give concessions ranging from paying closing costs to buying down interest rates.
[Read: Best Mortgage Lenders]
The No-Strings Advantage: Why First-Time Buyers Are Winning Deals
When you own a home, it might seem like you have a big advantage as a buyer. You can sell and use the equity in your existing property to help fund a new home.
But existing homebuyers often have the challenge of having to sell a home at the same time they’re buying one. In a market where sellers outnumber buyers, that can be tough.
Kate Wollman-Mahan, a real estate agent at Coldwell Banker Warburg in New York, says first-time buyers have a huge leg up in this regard.
“First-time buyers can be very desirable because they don’t have assets tied up in other properties,” she explains. “They don’t need to rent or sell another home to close or demonstrate that they can afford their purchase. This allows them to make cleaner, more efficient and straightforward offers.”
[See: Best Mortgage Lenders for First-Time Homebuyers]
Flexibility Goes a Long Way
Another thing Wollman-Mahan has found is that first-time homebuyers tend to be more flexible and generally more open to different home styles or layouts in the absence of having owned before.
“I think first-time buyers are more motivated and generally thrilled to own their first home,” Wollman-Mahan says. “They won’t let a small, solvable hurdle ruin the deal.”
Wollman-Mahan has seen repeat buyers risk walking away from a deal over an issue that can be resolved for a few thousand dollars.
“I don’t see that with first-time buyers,” she says.
Buy the House, Date the Rate: Navigating Elevated Mortgage Rates
Another reason first-time homebuyers shouldn’t give up hope? Today’s elevated mortgage rates are not going to stick around forever.
“My guiding principle is one you’ll hear around the industry when rates are elevated,” Watson says. “Buy the house, date the rate.”
As Watson explains, if you buy now while demand is lower but rates are higher, you can always refinance when rates drop.
“However,” he says, “you can’t go back in time when purchasing a home and ask for 2026 prices in 2028.”
[See: When Will Mortgage Rates Go Down? See the 2026 Forecast]
Long-Term Equity vs. Market Timing: Is It Safe to Buy Now?
When home prices are elevated, there’s an increased risk of ending up underwater on a mortgage, especially if you’re not making a large down payment, which may be the case if you’re a first-time buyer. Watson says some first-time buyers are afraid to buy now, only to see property values drop.
But as he likes to remind buyers, “It’s not about timing the market, it’s about time in the market. The longer you’re in that home, the better chance you’re going to have equity growth.”
A Redfin analysis of historical housing data shows U.S. home prices rose about 4.27% per year from 1967 to 2024. While home price gains can vary by region, Watson says if you’re planning to stay in your home for many years, that may be less of a concern. And he would know.
“My wife and I bought a home in 2006 just prior to (when) the housing bubble burst, so there was a time when we were underwater,” he says. “Instead of panicking, we held tight, and 20 years later, it is paid off and has tripled in value.”
New Credit Score Rules: How FICO 10T and VantageScore 4.0 Help You Qualify
In today’s challenging economy, qualifying for a mortgage can be tricky for first-time buyers who may be younger and have less robust credit histories. But that’s changing in a positive way.
In April, Fannie Mae announced that it will allow the use of VantageScore 4.0 and that FICO Score 10T will be allowed in the future. The Federal Housing Administration, meanwhile, announced it will allow VantageScore 4.0 and FICO 10T as eligible credit scoring models for FHA loans.
The benefit of these credit score models is that both use trended data. Instead of taking a snapshot of a borrower’s balances at one moment, trended data looks at borrower behavior over time, such as whether borrowers pay down balances month after month.
That’s especially helpful for younger borrowers and first-time homebuyers who may have shorter credit histories or rely more on credit cards on a short-term basis.
For example, under older credit scoring models, someone using a moderate amount of available credit could be penalized even if they consistently paid down their balances. VantageScore 4.0 and FICO 10 T are designed to spot that trend and use it to guide consumer credit scores.
That’s crucial, because as Wollman-Mahan says, “A first-time buyer must demonstrate they are qualified to complete the purchase.”
Wollman-Mahan also says it’s important to spend carefully for at least three months before submitting an offer on a home and mortgage application to keep your credit score in good shape.
“It is not the time to buy a car, go on a shopping spree at Bergdorf’s, or Venmo a large sum to a friend,” she says. Avoiding new credit or large purchases ahead of a mortgage application could make it a lot easier to get approved and lock in a more competitive rate.
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From Bidding Wars to Buyer Leverage: Why First-Time Homebuyers Shouldn’t Give Up in 2026 originally appeared on usnews.com
