Market Update

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.

Read the latest monthly market report

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.

Qualifying for the best possible 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.

Mortgage affordability calculator

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.

Find a lender, compare rates and get expert advice

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.

Zillow’s agent finder, which includes agent reviews

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.

5 ways to simplify the home shopping experience

Related: What to look for when buying a house & 5 expert tips to help home buyers win in this hot seller’s market

*Zillow research survey