First-Time Home Buyer Advice: Third Quarter 2025

Expert guidance for first-time home buyers

The housing market can be a tough and sometimes confusing place to navigate — especially for first-time buyers. Home buying conditions are in a constant state of flux, shifting over time and by geography.

Strained affordability pushed many prospective home buyers to the sidelines in recent times, waiting for improved conditions.

To gain insights and (hopefully) make matters easier, The Mortgage Reports spoke with industry experts to help guide borrowers in 2025’s third quarter. Answers have been edited for brevity and clarity.

In this article (Skip to…)

• What is special about Q3’s housing market
• Is it smart to buy with all the government uncertainty?
• Top advice for first-time home buyers

What is special or unique about the current home buying marketplace?

Andrea Blais, SVP of real estate lending at SchoolsFirst Federal Credit Union:

There are several, promising signs for first-time home buyers trying to find the right property to purchase. For one, inventory is rising and more sellers are showing a willingness to reduce the asking price. Interest rates are predicted to remain steady or even slowly decline for the remainder of the year.

Jay Crowell, national retail division president at Cornerstone Home Lending:

We’re seeing differential at a more micro level. There’s obviously more inventory now than there has been in the past. How massive that is really does depend on the market and the price points. I think in some cities, like Phoenix, we are starting to see a little bit of foreclosure or short sale happening. We don’t see that as much in Seattle, but we’re seeing that in some places where there was a big housing boom and now some of those jobs are leaving, some of those people are moving out. As a buyer, I think you really want to study your specific locale. Depending on the market, you might be able to win as a contingent buyer, which was totally unheard of across the country not so long ago.

Ralph DiBugnara, president at Home Qualified:

What’s most unique for first-time buyers is the competitive nature of today’s markets combined with higher rates and costs. But that is really market dependent. The housing market in the U.S. is very state to state and city to city. Some markets have huge housing shortages and homes for sale. But some other markets like Florida and Texas are in an oversupply and even declining home prices in some cities. What new home buyers are getting the benefit of is much more down payment assistance and grant programs than have been available over the last 15 years. This has been a major positive in helping new buyers.

Danielle Hale, chief economist at Realtor.com:

The current housing market is more varied than we’ve seen in recent years. In regions like the Northeast and Midwest, buyers face expensive real estate in big cities, and relative affordability in smaller, secondary markets. However, limited construction in this region means that a fair amount of price pressure persists even in affordable areas. Conversely, many markets in the South and West are seeing a move toward balance, with some seeing more homes on the market for sale now than we’ve seen since the beginning of the pandemic. This means, it’s more important than ever to pay attention to local market trends.

Angie Hicks, co-founder at Angi:

While the home buying right now has been somewhat challenging for potential buyers, a shared sentiment prevails: the American Dream, in its essence, remains seen as achievable for a majority of owners and of non-owners. Both owners and renters agree that owning a home is a sign of personal success and an essential component of building generational wealth.

Mike Hills, VP of capital markets at Atlas Real Estate:

First-time home buyer properties are still moving fairly quickly because it’s still advantageous to buy. (I define first-time home buyer properties as single-family homes that are at or below the metro area median.) At the end of quarter one, more than half of the houses in the Denver metro area had more than a $10,000 concession. Yes, rates are high, but if you have the right agent or professional, they can help guide you. Sellers are willing to offer concessions in order to buy down your rates.

Sam Royer, chief production officer at Salute Home Loans:

It’s all dependent on where you live. I think the big thing for first-time home buyers would be: as much as you can be patient, be prudent, and trust a professional who does this 24/7. Not a fly-by-night realtor or mortgage professional. The sky is not falling. Navigating waters like this is just having those professional people to help get you in the right loan.

Sam Williamson, senior economist at First American:

After years of a seller-dominated market, the U.S. housing sector is gradually rebalancing. In May, active listings rose 31.5% year-over-year, pushing the number of homes for sale above 1 million for the first time since the winter of 2019. Although still 14.4 percent below pre-pandemic levels, the gap is narrowing more rapidly in recent months—partly due to the return of more existing homes to the market as some sellers give up on waiting for lower rates before moving. This growing supply is giving buyers more options and increasing competition among sellers, helping stabilize prices or even drive modest declines in some markets. For buyers—especially those who’ve been priced out—the current environment offers more negotiating power and a wider range of choices than in recent years.

How can you navigate all the governmental turmoil and uncertainty?

Blais: The vital thing to remember is that buying a house is an act of making your household more stable, as it provides a long-term investment opportunity, especially compared to no-return rental costs. When it comes to finding the right loan to finance your dream home, take the time to research different loan products and better understand how they align with both your short and long-term objectives. First-time home buyers should exhibit patience in the process, above all else, and not rush to judgment; time is on their side as it is a buyer’s market.

Crowell: Trying to predict the future is hard. If we were to have a war and inflation, hard assets and home prices typically do well. I would not get caught up in trying to find perfect and get into a home that fits right. So I kind of feel like failing to own is a big mistake that you can’t afford to make. It’s not a crazy hot market, so you’re not getting pushed and rushed into a bad decision. If you find a house that meets your needs, just understand that if that same house was available and the interest rate had a five in front of it, you’d be paying 5% or 10% more. At the end of the day, you should be focused on finding a great property and refinance when rates improve.

DiBugnara: The best thing a new home buyer can do in today’s market is create a personal budget and stick to it. High rates, high insurance costs, and possible bidding wars can always make it seem like spending more is necessary. I believe having a budget that includes what housing payment is affordable can keep buyers out of making a bad investment.

Hale: To navigate uncertainty, I recommend that home buyers focus on what they know and what they can control. They likely have a strong sense of what they’re looking for in a home and should use that to whittle down a must-have versus nice-to-have list. Although buyers are seeing more negotiating power in many markets, prices and mortgage rates remain elevated, so budget tradeoffs are likely to be needed.

Buyers have a fair amount of control over their finances, and they can focus on doing what they can to lower their mortgage rate, no matter what happens in the broader macro environment. To lower a rate, they can 1) pay off debt or grow income to improve their debt-to-income ratio, 2) reduce their loan-to-value ratio by putting more money down or considering lower priced homes, 3) improve their credit score by reviewing their history and paying bills on time, and 4) shop around among lenders. Research from Realtor.com showed that the biggest potential savings came from shopping around for a lower rate, which is helpful because it’s a strategy that doesn’t require a lot of lead time to implement.

Finally, although consumers are in general less concerned with job stability than they were earlier in the spring and the unemployment rate continues to hover at a low level, it’s worth taking stock of your situation before committing to a home and a mortgage. One way to hedge against job or income uncertainty is by ensuring that you have some savings leftover after moving and home buying expenses that can serve as an emergency fund. Planning for an emergency fund at the outset when establishing a budget will keep it from getting overlooked.

Hicks: People need to start thinking longer-term when it comes to buying a home. In our recent survey, we found that homeowners now plan to stay in their homes an average of five years longer than originally expected. It’s really challenging to find a starter home now, so you might be buying a bigger home that is more of a fixer-upper. However, you don’t want to compromise on key things. Think about where you want to be located, what features are most important, and how you can buy the home and feel comfortable in it for a long time.

Hills: For home buying, local politics are so much more important than national politics. The government is not going to take care of you. You know, your company, your pension, is likely not going to take care of you. So you need to learn to take care of yourself financially today, and the best thing that I think you can do is own a home. Homeownership is the building block of financial security. It changes the family dynamic and it changes community dynamics over the long term with pride of ownership. Get in now, get in before the next Spring home buying season.

Williamson: In today’s market, where economic uncertainty and market volatility dominate the headlines, it’s understandable that prospective home buyers may feel hesitant. Yet for those who are well-prepared, uncertainty can also create opportunity. The key lies in readiness and perspective. Buyers who have evaluated their finances, secured mortgage pre-approval, and understand local market trends are better positioned to act decisively when the right opportunity arises. While timing the market perfectly is rarely possible, making informed decisions based on personal circumstances—rather than headlines—can offer a strategic edge.

What’s the top piece of advice you’d give first-time home buyers in 2025’s third quarter?

Crowell: I always look at it this way: housing is a basic need. Homeownership is one of the key impactors of your lifestyle. And I think if anything has proven itself, it’s that those who have been waiting to get a lower interest rate missed opportunities. I’d say if you’re going to be in an area for five years or more, then I would be disciplined to hunt for a good home that meets your needs. Let’s say a house checks 85% of your boxes and it’s in your budget, then I would buy it and not overthink it. Homeownership is probably the key foundational building block for creating wealth in our country, because of the tax code, because of principal reduction, because of relatively inexpensive, fixed mortgages. Making that mortgage payment versus paying rent builds equity.

Hale: In the third quarter, the housing market is usually past the spring frenzy and seasonally shifts in a more buyer-friendly direction in a trend that usually lasts through the end of the calendar year. When this happens, sellers tend to be a bit more open to negotiating and buyers typically have more time to make decisions. This year’s buyer-friendly seasonal shift could be more pronounced as signals like price reductions among for-sale homes are rising far earlier than is typical. This will create an opening for first-time buyers, so it’s a good time to shop. Even in a market that’s more buyer-friendly, a budget is still an essential tool for keeping you on track, setting yourself up for a monthly payment that fits your lifestyle and sustainable homeownership.

Hicks: Determine your budget and your key needs and then figure out where you can compromise to get what you really need as a homeowner. As you’re doing this, make sure to think long term. You want to be in your home for at least 5-10 years.

Hills: Don’t be afraid. Is the world a scary place? 100%. But as a renter, you’re making landlords rich. Have a little bit of control of your financial destiny and bet on yourself. Be glad that you did in Q3 specifically, usually prices and the market slow down a bit, so maybe you can take advantage and get a bigger rate buy down or more concessions or get the roof fixed, etc. I think it’s likely going to remain a buyer’s market for at least the next six months, but nobody knows.

Williamson: With more homes hitting the market in many parts of the country, don’t fixate on any single property. Chances are another great option is just around the corner. Similarly, avoid overstretching yourself to chase ‘the one.’ Instead, stay grounded in what you can comfortably afford and be ready to act when the right fit appears. And, with sellers facing more competition, don’t hesitate to ask for extras—whether it’s help with closing costs, appliance packages, or repairs before move-in. In this environment, a combination of patience, preparation, and smart negotiation can work strongly in your favor.

The bottom line

Buying your first home can be as intimidating as it is exciting. But preparing yourself and heeding sound professional advice can help you navigate the housing market.

If you’re ready to begin your path to homeownership, find a local lender and real estate professional you trust to get started.