How 4 First-Time Homebuyers Broke Into Today’s Market

Buying a home for the first time is stressful, especially today. High interest rates, steep home prices, limited supply, and economic uncertainty are all hurdles in 2025. According to Bank of America’s 2024 Homebuyer Insights report, 57% of survey respondents say they’re unsure if it’s a good time to buy, with 41% saying they aren’t confident in their understanding of how to finance or secure a mortgage.

For first-time homebuyers, the process can be especially anxiety-inducing. There’s so much to know: how to pick the right team, how interest rates play a role, and perhaps the question at the top of many minds: Am I making the right financial choice?

Well, don’t fret. We spoke with four first-time homebuyers—real people just like you—to gather their advice and insider tips from their experiences. Along with expert guidance, we’re here to tackle all your questions and concerns about buying your first home.

3 Big Lessons From 4 First-Time Buyers 

1. Be Patient and Wait for the Right Opportunity

They say patience is a virtue and apparently, it’s big when it comes to homebuying. For first-time homebuyers, there’s a balance for knowing when to hold your horses and when to charge forward. 

“I’m a very impatient individual,” said Mia Ingui, 26, who bought a townhouse in Middletown, New Jersey, with her fiancee in October 2024 after searching for three months. “I was starting to get incredibly anxious, and [feeling] like there was nothing out there.” 

Many of the houses Ingui looked at needed extensive gut renovations, and even these were getting outbid well above the asking price. Despite her antsiness, Ingui pivoted to a different plan rather than trying to force what she initially envisioned.

“We reshifted our focus and started looking at townhouses, and that changed the game. I’m glad I stayed patient and explored something different because what we were doing before was not working for us.”

Nathan Neri, a 29-year-old single buyer in Alexandria, Virginia shared a similar experience of needing to adjust his expectations in 2023. He was focused on purchasing a two-bedroom condo in a large high-rise building or in the burbs that he could eventually rent out. 

“[Patience] was probably the hardest thing. There were many [houses] that I could afford and could have just pulled the trigger on.” 

He was trying to determine his priorities, including better commute and culture. For three months, Neri weighed his options—a two-bedroom condo in a large high-rise building or a condo in the burbs that he could eventually rent out. 

“There’s a lot that goes into it, and I think the most difficult piece was, where do I sacrifice? I have a dog, too, so I had to make sure that the place was pet friendly, especially if I am planning to rent it long term.”

Taylor Kovar, CFP, CEO and founder of 11 Financial, and member of Investopedia’s Advisor Council, further emphasized the role of patience and flexibility.

“I encourage clients to be patient and flexible. The market can be tough, and sometimes you have to adjust your expectations–whether that means looking for a smaller home, a different neighborhood, or reconsidering what you thought you could afford.”

Don’t be discouraged if the process isn’t going how you initially planned. Bumps in the road and readjustments are normal. 

2. Lean On Your Network

Using your network is one way to get better insights and financial deals during your homebuying process. You’d be surprised how much word-of-mouth can unlock valuable tips or opportunities you might not be aware of.

For example, 34-year-old Shaun Fitzpatrick and her husband bought their home in Philadelphia in December 2024 from their landlord, which they had been renting for nine years. 

Her landlord wasn’t even initially in the market to sell the house they were renting, but having a good relationship worked in their favor, and they were able to buy a home they otherwise might not have had access to.

Personal connections can also be useful when it comes to financing a home. 

Erin Johnson, 36, from Brooklyn, New York, dreamed of buying a condo in O’ahu, Hawaii, and was able to negotiate family financial support to help with her down payment. She ultimately bought it in February 2025. 

“For me, it was important to have a verbal conversation. I put the numbers down of what I could contribute, what I wanted them [her parents] to contribute and what the final number was,” Johnson said. 

Experts, including Ryan Greiser, CFP, co-founder of Opulus LLC, and member of Investopedia’s Advisor Council, echo the importance of setting clear parameters when receiving financial support from friends or family.

“When accepting family financial support, clear documentation prevents future resentment,” he said. “Explicitly define whether it’s a gift, loan, or investment before accepting a dime. Discuss expectations about repayment, equity sharing, or involvement in decisions upfront.”

3. How To Set Your Budget in a Competitive Market 

Realistic budget expectations and strategic thinking are essential, especially in a competitive market. 

According to Redfin, as of February 2025, U.S. median home prices were up 3.1% compared to last year, selling for $425,249.

Ingui recommended that once you determine your price range, to look for houses that are $30-40K under that. This will allow flexibility during bidding wars. 

Some real estate professionals suggest offering 1%-3% above the asking price, while others advise going above just a few thousand dollars more than the highest bid. There’s no one answer, but be prepared to bid in a competitive market—and in some cases, afford to pay above asking. In February 2025, 24.7% of houses sold above their listing price, nationwide. 

Once you know how much home you can afford, leverage different accounts to maximize your savings. For example, Ingui used high-yield savings accounts and funds from CDs to store her down payment and ultimately buy her condo in February 2025.

It’s also worth checking to see if you can qualify for a lower down payment. For example, Fitzpatrick’s husband works for the government, so they got their mortgage from a federal credit union that allowed her to put less than 20% for their down payment and avoid paying private mortgage insurance (PMI).

“Many states have grants available to first-time homebuyers, teachers, and first responders to offer down payment assistance,” said Emily Gregg, realtor at Fathom Realty. “USDA loans can be a great option to get a home with zero percent down,” she added. 

Alternatively, Neri took money from his 401(k) to pad his down payment. He had been maxing out his 401(k), and after speaking with his financial advisor, he felt comfortable taking money out. His company doesn’t normally let employees take out 401(k) loans, but it has an allowance for primary home purchases.

Taking out a 401(k) loan to fund a down payment can provide quick access to cash, but you should consider the future costs. The loan eventually needs to be paid back, usually within five years, so its monthly repayments (including interest) need to be incorporated into your overall budget. This means you’ll be paying back both your 401(k) loan and your new mortgage.

Build a Smart Team To Secure the Best Deal

Outside of the real estate agent, there are other people who can play a big role in your home-buying journey. 

Stephanie Casazza, a real estate broker at Christie’s International Real Estate in New Jersey, said one of the top pieces of advice she’d give first-time home buyers is to “build a good team [made up of] an attorney, inspectors, and lenders before you start looking.” 

Johnson’s loan officer team helped her secure a 2-1 buydown loan, a mortgage agreement that lowers the interest rate on the mortgage for the first two years before it rises to the regular fixed rate. Lenders charge an additional fee to compensate for the interest they won’t receive in those first few years.

A loan officer is a representative of a bank, credit union, or other financial institution who assists borrowers in the application process. 

Matt Davis, broker and 2025 NAR regional vice president for Region 6, further emphasized the importance of finding a good lender who can advocate for you.

“Local lenders often have a better understanding of the hyper-local market and can offer personalized service. Your agent can help you identify preferred lenders who provide the attention and expertise that big-box national lenders may lack,” said Davis. 

Financial advisors can also play a big helping hand during the process. For example, Ingui’s advisor knew of a “pledged asset” feature their bank offered. Essentially, this involved using securities in their brokerage account as collateral and knocked down their interest rate from 6.5% to 5.8%. By having a CFP on her team, she was made aware of this deal she might not normally have known about.

Use a Real Estate Agent

One can’t talk about homebuying without discussing a real estate agent. They are usually paid through a commission, so hiring someone you trust and who has your best interest at heart is key.

“My realtor played the support role of a partner at times. [If you are a single buyer] there’s no need to be hyper-independent about it; definitely lean on the team that you and your realtor have assembled,” Johnson said.

Riding the Interest Rate Rollercoaster

Mortgage rates are the percentage of interest charged on a home loan and can change based on the economy and individual factors like credit history. Homebuyers can choose between fixed rates, which remain constant throughout the loan term, or adjustable-rate mortgages (ARMs), where the rate may change over time.

With mortgage rates hitting historical highs over the past few years, every percentage point matters. Currently, it’s still a seller’s market, with mortgage rates averaging at around 6.65% in March 2025. Rates have more than doubled over the past four years; in February 2021, the 30-year average was nearly 3%. So, it can be a bit disheartening to see these rates compared to what they were around COVID-19. However, there are strategies to approach these daunting numbers.

“A lot of first-time homebuyers worry about locking in the best rate. I typically advise clients to start with getting pre-approved so they can lock in a rate before they begin looking for homes,” said Kovar. 

But how do you ultimately know when to bite the bullet on a house with fluctuating interest rates? 

 “I knew nothing about interest rates when I first started learning about real estate. The reason I bought at 6% in 2022, despite people saying that the rates are so high, is because I did a Google search to see what the rates were in the 1980s and 1990s. They were in the mid to high teens,” Neri said.

After comparing the historical trends, he ultimately decided to buy.

 “My gut was telling me, you don’t know where the market is going to go, and I’d rather roll over and buy, and if it goes down to 3%, I’ll refinance. I would rather buy at 6% than wait and pray.” 

The Essential Role of Home Inspections

Home inspections cost about $350 on average and are showing an upward trend in popularity. You should take home inspections seriously: they can help you decide whether to keep negotiating, take on the work, or back out altogether.

A home inspection evaluates a property’s safety and condition, alerting buyers to potential costs and repairs. Following COVID-19, demand surged, and people began to skip inspections. In fact, according to the National Association of Realtors, 25% of buyers waived an inspection contingency in April 2021 and reached a peak of 30% in June 2022.

In today’s hot market, some buyers may be tempted to skip an inspection to lock down a house that has multiple offers. However, waiving an inspection risks overlooking issues like bad wiring or structural issues. 

Our interviewees had various experiences with their home inspections. For instance, Neri’s house had caulking that needed stripping, a water heater to be replaced, and some mildew and flooring issues.

“The seller, I believe, ended up coming down five grand—it wasn’t anything absurd. I asked my real estate agent and they said they didn’t think they were going to come down any further.”

Neri knew the place was more affordable due to some of the needed renovations, so he was willing to take them on.  

“The key is understanding what repairs are absolutely necessary versus what can be left for later. If the seller is unwilling to cover repairs, buyers can sometimes negotiate a price reduction or ask for a credit toward repairs,” Kovar said. 

On the other hand, Fitzpatrick backed out of the contract for a home she was initially excited about due to its inspection.

“[It] was devastating because I loved this house so much,” she said. The inspector called out wiring issues, rotting, a leak, a hole in the basement, and more. 

Don’t Skip the Final Walkthrough, Either

The last step in the home buying process is the final walk-through when you look over the property one more time. This step checks that no damage occurred during the last inspection, that the seller has completed the required fixes, and that no new problems have arisen.

“I was just really surprised when I saw the place empty. I noticed a lot of the problems, and to this day, five months later, we are still renovating and fixing things up.” Ingui said. 

Closing the Deal

Review all your closing paperwork carefully. You might feel pressure from the notary or lender, but it’s important to understand all the documents you sign. Prepare your questions in advance or consult a real-estate attorney. The Consumer Financial Protection Bureau offers a closing checklist and guide.

The Bottom Line

Homebuying is no easy feat; perhaps it can feel like an impossible task at times. However, as shown by our first-time homebuyers, you can do it.  By doing your research, having patience, creating a sound budget, and developing a strong team, you can make your home-buying dreams come to life.