First-time home buyers
Home buyers have a bit more negotiating power now — more time to consider their options, and less chance of a bidding war. That’s especially helpful for first-time buyers who have routinely been outbid by repeat buyers during the pandemic.
The housing market right now:
▪️The typical U.S. home value fell slightly from December to January (-0.1%). U.S. home values are still 6.2% higher than a year ago.
▪️Median time on market, 31 days, was slower than the last two years but faster than pre-pandemic norms to start the year.
▪️Inventory remains very low to start the year, at its 2nd lowest January level on record.
Related: Zillow names the 10 best metros for first-time home buyers in 2023
Getting finances in order
When Zillow asked five questions about credit scores, the average American only answered two of the five correctly. Yet a good credit history is key to getting the best possible loan; here are the four things first-time buyers should do to qualify for the best possible mortgage interest rate.
You may be eligible for down-payment assistance. Learn more >
How much can a first-time buyer afford?
As mortgage interest rates fluctuate, aspiring buyers can start with a mortgage calculator and affordability tools to understand what they can realistically afford on a monthly basis.
Zillow’s affordability calculators take into account some of the hidden costs of homeownership. First-time shoppers should also explore down payment assistance programs they may qualify for.
Related: 6 common first-time buyer mistakes — and how to avoid them
Borrowing options for first-time buyers
First-time buyers can gain a competitive edge by getting pre-approved for a mortgage. A Zillow survey finds 86% of sellers prefer a buyer who has been pre-approved, as opposed to pre-qualified, for a mortgage.
For first-time buyers, persistence is key: Nearly half of all first-time buyers (47%) are denied a mortgage at least once before ultimately being approved.
Related: Top questions to ask a mortgage lender & Is an adjustable rate mortgage right for you?
Finding the right agent is key
Navigating today’s housing market can be confusing and stressful, and acting quickly can be key. The right agent can help; according to Zillow Research, 85% of buyers use a real estate agent or broker.
Related: Benefits of real estate agents for home buyers & Tips for hiring a buyer’s real estate agent
Improving the home search
In a Zillow survey*, nearly three-quarters of successful buyers wish they had done at least one thing differently. Digital tools can simplify the home-shopping experience, helping new buyers more easily home in on the right home.
Related: What to look for when buying a house & 5 expert tips to help home buyers win in this hot seller’s market