So You Want to Buy Your First Home. Here's What the Data Says You Should Know.
Buying your first home has never been harder — or more important to get right.
According to the National Association of Realtors' 2025 Profile of Home Buyers and Sellers, the share of first-time buyers has dropped to a record low of 21%, while the typical age of a first-time buyer has climbed to an all-time high of 40. That's not a coincidence. Rising home prices, elevated mortgage rates, student loan debt, and high rents have pushed more would-be buyers to the sidelines for longer — and delaying homeownership from age 30 to 40 could mean losing out on roughly $150,000 in equity on a typical starter home.
If you're ready to stop waiting, here's what you need to know before you make your move.
Get Pre-Approved — Not Just Pre-Qualified
Before you browse a single listing, get a mortgage pre-approval in hand. Pre-qualification is an informal estimate based on self-reported numbers. Pre-approval involves the lender actually verifying your income, credit, and assets — and it's what sellers take seriously in a competitive market.
When you apply, lenders are required to give you a Loan Estimate within three business days, which lays out your loan terms, projected payments, and itemized closing costs. Use it to compare at least three lenders before committing.
Budget Well Beyond the Purchase Price
The sticker price on a home is only the beginning. Closing costs have risen roughly 3.8% nationally and now average around $6,900 on a $350,000 home, excluding prepaid items. More broadly, buyers can expect closing costs to run between 3% and 6% of the loan amount — on a $200,000 mortgage, that's $6,000 to $12,000 due at the table, on top of your down payment.
Then there are inspections (which you should never skip), moving costs, and the ongoing monthly expenses of homeownership — property taxes, insurance, and maintenance — which typically add $800 to $1,500 per month beyond your principal and interest payment.
Today's first-time buyers are putting down 10% on average — the highest share in nearly 40 years — a sign that people are arriving more financially prepared than past generations. That discipline pays off.
Work With the Right Agent
Following recent NAR settlement changes, home sellers are no longer required to cover the buyer's agent commission, making it more important than ever for buyers to understand how their agent is compensated and to negotiate those terms clearly. Look for a buyer's agent who specializes in first-time purchases and knows your target neighborhoods well — not just someone who will unlock doors for you.
Be Patient. The Market Is Shifting in Your Favor.
Here's the good news: although inventory fell slightly in Q4 2025, it remains up 13% compared to a year ago, and mortgage rates eased toward the end of the year, bringing the typical estimated first-time buyer payment down to around $3,100 per month. Rates are projected to ease further toward 6% in 2026, potentially opening the door to homeownership for as many as 1.6 million renters, according to NAR research.
The buyers who win in this market are the ones who come prepared, move decisively when the right home appears, and don't let impatience push them into a deal they'll regret. The data is on your side — if you do the homework first.
Sources: National Association of Realtors 2025 Profile of Home Buyers and Sellers; NerdWallet Q4 2025 First-Time Home Buyer Affordability Report; Rocket Mortgage; LodeStar Software Solutions 2025 Closing Cost Data Report.
