The results of the annual First-Time Homebuyer Pulse survey, conducted by TD Bank, America’s Most Convenient Bank, showed that despite obstacles like high interest rates and affordability, respondents were eager to proceed with their plans to become homeowners and had strong trust in the housing market.
First-time homebuyers continue to be optimistic and in high demand as mortgage rates have lately begun to decline, according to the National Association of Realtors (NAR). According to TD’s annual study, despite concerns about housing affordability, nearly half (47%) of respondents are already saving for a down payment, and three out of four (74%) are positive about the state of the housing market.
“Optimism in the housing market is a positive sign for first-time homebuyers, as it encourages them to become more strategic and adaptable in their journey to homeownership,” said Steve Kaminski, Head of U.S. Residential Lending at TD Bank. “These results tell us that more and more first-time homebuyers have greater confidence in navigating the homebuying journey, and it’s likely because they are better financially prepared and more well-informed during the decision-making process.”
Some 1,001 Americans who intended to buy their first house in 2025 were polled by TD Bank to learn more about their expectations for the housing market and their level of readiness to deal with issues like home inventory and purchase prices.
Homebuyers Face Affordability Hurdles as They Evaluate & Prepare for “Financial Readiness”
Even though 85% of respondents say they value homeownership and 79% of all respondents think their personal financial situation is solid, many first-time homebuyers continue to struggle with the growing costs of homeownership. An estimated 62% of respondents say they are worried about their capacity to pay for their other costs in addition to buying a home because of inflation, and almost two-thirds (64%) say they are anxious about their ability to afford a home in the current market because of interest rates.
Many purchasers say they have taken proactive measures to increase their financial preparedness in response to rate concerns. With 51% of respondents paying off as much debt as feasible and 44% making sure their credit report is error-free, 88% of respondents have taken steps to improve their credit score in preparation for buying a home.
With 33% of first-time homebuyers stating they received a donated down payment from family or loved ones, some have resorted to relatives for assistance in overcoming the difficulties of saving.
Homebuyers Reveal Additional Considerations:
- Family is #1: When buying a home, three out of ten respondents (29%) stated that being near family is one of their top three objectives.
- Building wealth through homeownership: Most first-time homebuyers (88%) believe that purchasing a home is a wise long-term investment. The trend toward homeownership as a significant financial strategy is shown by the fact that almost half (46%) of Gen Z respondents are keen to use homeownership as their starting point for developing wealth.
- Millennials foresee market factors: In order to show that they are financially prepared, half of Millennials have taken into account the costs of owning a home, including utilities, property taxes, upkeep, and insurance.
- Traditional expectations are no more: In contrast to the conventional assumption of a 20% down payment, 43% of LMI respondents think that a 10% down payment is required because it can be one of the largest barriers to buying a home. The road to homeownership is made easier by working with a TD Bank Mortgage lending Officer to investigate more accessible lending programs with low down payment possibilities.
First-Time Buyers Seek Professional Advice
The process of buying a home can be intimidating for many first-time buyers. Indeed, approximately 55% concur that the homebuying process is overwhelming them. But they’re addressing these emotions head-on by seeking advice from mortgage experts. In order to better understand what is reasonable and practical for their particular lifestyle, some 22% of all respondents have already developed a customized homeownership budget with their mortgage broker, and another 26% intend to do so during their meeting with a mortgage broker.
Beyond professional guidance, people from all economic situations are becoming more confident. Compared to 56% in 2024, three out of five (61%) low- to moderate-income (LMI) respondents said they are aware of the mortgage procedure. Additionally, more LMI purchasers are aware of down payment assistance schemes, while some 66% of them are now aware of them—up from 54% in 2024.
“Resources and guidance help first-time buyers move from initially feeling overwhelmed to feeling more confident and ready to navigate the homebuying process,” Kaminski said. “By leveraging these tools, prioritizing financial readiness, engaging in early discussions with trusted lenders, reducing debt and increasing savings, buyers can make more informed decisions and feel empowered to take the next step toward homeownership.”
First-time buyers continue to face difficulties due to a shortage of available homes, even while the demand for homeownership is still high. Nearly one-third of respondents (31%) said they are looking to build their own homes or purchase a newly constructed home rather than an existing one, indicating that new building is becoming a more alluring choice as many people struggle to find homes within their budget.
Younger generations are especially interested in building their own homes, according to data, with 19% of younger millennials saying they would be willing to do so, compared to only 8% of Gen X and 13% of all respondents. In addition, 22% of New Yorkers say they want to build their own house, indicating that there are other options for achieving homeownership in their market.
Despite not starting from scratch, 23% of first-time homebuyers budget for repairs and modifications, indicating that they want to customize their new residences to suit their needs.
However, new building and home renovations continue to be a challenging road for first-time homeowners due to a labor shortage of between 200,000 and 400,000 construction workers, as reported by the National Association of Home Builders (NAHB), as well as issues with land availability and material pricing. Notwithstanding these obstacles, younger homebuyers’ increasing interest in construction shows how determined they are to find answers in such a cutthroat market.
“NAHB commends Reps. Juan Ciscomani, Don Davis, Ryan Zinke and Marie Gluesenkamp Perez for championing bipartisan legislation that will help ease the nation’s housing affordability crisis by addressing the severe labor shortage in the construction industry that is delaying home building projects and increasing construction costs,” said NAHB Chairman Carl Harris. “The CONSTRUCTS Act provides the nation’s community colleges and trade schools the funding needed to train students in trades that support the residential construction industry.”
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