1. What issues are first time homebuyers facing in the current US housing market right now? When I purchased my initial property as I was beginning to invest in real estate, I remember getting surprised at how fast homes were being grabbed... and that's way before the record-high interest rates and limited supply we're experiencing today. Nowadays, I think it's become even more difficult. First-time homebuyers have to compete aggressively with investors and all-cash buyers, which will make the experience seem like a rush. The toughest thing is striking a balance between fast and right decision-making. 2. What are the key issues first time buyers need to take (e.g., strong credit report and decent down payment, for example) and complete before buying a new home? What are your best preparation tips and why? Something that I learned early on as an investor is that preparation can be your secret weapon. I had my credit in line, down payment at the ready, and my pre-approval for a mortgage prior to house hunting. I also accounted for "hidden" expenses such as repairs, taxes, and insurance. I think that because I did that, I had an advantage. For one, sellers saw I was serious, and I did not risk getting in over my head financially. 3. What's your best piece of advice for a first time homebuyer right now? When I purchased my initial investment property, I nearly took a property that "would do" simply because I was frustrated with searching. I'm so glad I didn't! The ideal home needs to meet your requirements, your price range, and your long-term objectives. So, my tip is to never allow pressure from the market to drive you into a choice you'll regret later. The ideal offer and home is worth waiting for!
At The Jimmy Welch Team, we're seeing first-time buyers hit the same two walls: low supply and increasing interest rates. Homes are selling quickly, often within hours, and that quickness surprises people. Add that to competitive bidding and tighter lending standards, and you understand why showing up unprepared is dangerous. Begin with the fundamentals. Fix your credit. Save a down payment you can actually use. Get pre-approved, not pre-qualified, by a lender you trust. That's your key to act fast when the perfect home appears on the market. Examine your budget carefully and include more than the mortgage. Closing costs, taxes, insurance, and repairs cost money. Know your needs from your wants. That one step, by itself, can save you days in searching and prevent hesitation when you need it most. Here's my top tip: don't go through this market by yourself. An experienced local agent can pace themselves to the market's demands without pushing you into making a hasty decision that will haunt you. We've helped hundreds of first-time buyers through tough offers by thinking ahead, being focused, and ensuring each step is intentional. That's how you secure your first home.
A major hurdle for first-time homebuyers right now is the lack of true "starter homes" in livable condition. Many lower-priced options look fine in the listing photos, yet once you step inside, you realize they need major renovations. With labor shortages pushing construction costs higher, those repairs can quickly wreck a budget. Go in with a clear renovation limit, get accurate repair estimates before making an offer, and work with an inspector who will give you the unfiltered truth. In a tight market, a fixer-upper can still be a smart move if you know exactly what you're walking into.
1) I've seen the numbers. I know that homes are lingering on the market for longer and longer right now. That doesn't mean those homes are desirable for first-time homebuyers. Most of them are suburban McMansions that are way out of entry-level price ranges. 2) Because housing is so expensive, you owe it to yourself to explore every possible option for making it more affordable. This means building your savings for a down payment, doing everything you can to improve your credit score, exploring down payment assistance from local governments, friends, and family, and looking into starter-friendly mortgages like FHA and USDA loans. 3) Don't buy just to buy. Homeownership is a smart financial move, but over-extending your finances to get into a house you'll struggle to maintain is a mistake.
First time home buyers are up against the odds at the moment due to limited housing inventory, high prices, and mortgage rates that are still elevated compared to a few years ago. Competition can also be intense, which often leads to bidding wars. Many are also struggling with affordability due to stagnant wages not keeping pace with housing costs. The result is that buyers have to be more strategic and better prepared before they even start looking. This means that it is imperative that buyers create a strategy and plan of action first. You need to know exactly how much you can borrow, what restrictions will be on your mortgage rate (is it fixed or variable?), how much, if anything, are you willing to offer over asking? Are you comfortable with escalation clauses? There is so much to consider. The first step is to really take a look at what you are able to put as a down payment. Should you stick to 10%? Or would it be beneficial to put down more initially and have a smaller monthly payment? When reviewing your personal finances don't forget to budget for closing costs, moving expenses, and any necessary renovations. The next step is to review your credit report with all 3 big credit bureaus (Equifax, TransUnion, and Experian) & make sure they are as strong as possible. Lenders will offer better rates and terms to those with solid credit histories. Then, get pre-approved for a mortgage. This gives you a clear understanding of your budget and shows sellers that you are a serious buyer that has the money ready to go. Once you have a clear picture of what your budget and mortgage rate is, the next step is to research neighborhoods carefully and factor in things like schools, community amenities, commute times, lifestyle choices, and long-term resale potential. This is the moment to really hone in on what exactly you want within the confines of what is actually possible. Preparation is key because the more you have in order before you begin, the smoother and faster the buying process will be. My best advice, especially to buyers in crowded markets, is to not let emotion drive your decision making too much. It is easy to fall in love with a property, but you must stay grounded and make sure it fits both your financial situation and your long-term goals. Take the time to learn about the market and work with an experienced real estate professional who can guide you through the process. Patience and preparation will save you from costly mistakes.
The biggest trap for first-time buyers isn't just the sticker price or interest rates. It's the quality of the affordable inventory. You're often looking at the same houses that investors like me are targeting, but we see them very differently. A buyer sees a 'charming fixer-upper,' while I see a 15-year-old HVAC system and a roof with five years of life left. We build those massive, unglamorous costs into our offer. Most first-time buyers don't, and they get emotionally invested in a potential money pit. My best piece of advice is to analyze the property like it's a business acquisition. Before you even think about making an offer, get a contractor to walk through with you and give you real quotes on the big-ticket items (roof, foundation, plumbing, electrical). This isn't about being pessimistic. It's about making sure your first home builds wealth instead of becoming a financial drain that forces you to sell to an investor like me a few years down the road.
What issues are first time homebuyers facing in the current US housing market right now? For first time buyers, there is a trifecta of high interest rates, low inventory, and seller competition (increasingly from cash offers - and oftentimes not even primary residence homeowners at all). In markets like Des Moines, that has meant entry level homes are not just scarce but moving quickly as well — sometimes with multiple offers and over asking price. This results in a shorter decision timeline and buyers being forced to waive contingencies or forgo inspections, leading down the path of expensive surprises. And secondly, because interest: the high rates can mean higher monthly payments and bank underwriting is neural net stupid so it doesn't care about your plans for paying off the house sooner; all of which voodoos purchasing power down to where you have to decide on buying location OR condition echoesechoschoes. What are the key steps first time buyers need to take before buying a home? What are your best preparation tips and why? The first one is financial readiness which includes good credit, a practical budget, and reserves and down payment in the bank. In Des Moines, buyers should have the additional power of at least three months' worth of mortgage + reserves after closing to account for unexpected surprises. The next step is to educate yourself, put in the time to understand what is happening on the ground in your market before entering. This might entail following your agent to a few showings or keeping tabs on the sales data in your preferred neighborhoods. What's your best piece of advice for a first time homebuyer right now? It is in this respect, firstly be a positionment, not just shopping for a home. That means having your finances ready as well as making sure you are mentally willing/wanting to do the deal, but also being disciplined enough to walk away if this is not good for your goals. In markets moving as fast as our market, the first offer you lose says more than the first one you win. Clients of mine have only found exactly what they were looking for, after they stopped trying to catch "anything" in favor of "the right thing," with clear priorities and a willingness to strike quickly.
1) Lack of inventory is the biggest problem, especially on the more affordable end of the market. There are plenty of suburban homes, and more apartments than there were, say, 5 years ago, but small single-family homes at reasonable prices are basically impossible to find. 2) Before you ever start looking at houses, focus on mortgage preapproval. This is an essential step since it provides proof that you can afford to get financing for a home. Pay down your debts, keep up with recurring payments, build your savings, and avoid taking out new loans for a while. 3) One of the biggest issues in the current market is that the homes aren't where the good jobs and schools are. If you can work remotely, you can have your pick of affordable housing in rural areas and the rust belt.
In today's US housing market, first-time buyers face limited inventory, higher interest rates, and strong competition from both cash buyers and investors. These factors often make it harder to secure a home in a preferred location without stretching the budget or making compromises. Much like when preparing to expand a self-storage portfolio, success starts with a solid foundation before any big moves are made. Before beginning the search, buyers should have their credit report in top shape, a realistic budget, and a pre-approval letter ready. Building up a healthy down payment can lower monthly costs and remove the need for mortgage insurance in some cases. Just as we thoroughly assess a storage property before acquisition to ensure smooth operations and long-term profitability, homebuyers benefit from doing their due diligence before stepping into negotiations. The best advice for a first-time buyer right now is to focus on both preparation and flexibility. In self storage acquisitions, we often look at a property for what it can become, not just what it is today. Similarly, buyers should evaluate homes based on current needs and potential for future value. Being open to different neighborhoods, homes that need light updates, or properties that allow for future expansion can create more opportunities in a tight market.
A failure to plan the long term costs of a home is one of the biggest problems that first time homebuyers encounter. Lots of people have a budget on their mortgage but totally underestimate the utility cost. The electricity bill of an average home in most US states may cost over 1,500 dollars in a year. That number can soar high when the home lacks proper insulation, a leaky roof or an inefficient heating and cooling system. Even houses with the same square footage have Utility bills that are 40 percent more due to such problems. My top tip on preparing a first time homebuyer would be to get a professional home energy audit. This audit is an examination of the energy usage of a house. A professional will examine heating and cooling systems, test the amount of insulation, and find out how much air is escaping. The audit gives a clear scenario of the long term energy expenditure of a home and the possible areas of amelioration. The audit can then be used by a homeowner to make a wise decision and negotiate with the seller on upgrades. This is a much more tactical way of doing things than merely considering the listing price of a home. It can assist a buyer to know the actual long term price of a home and this may avoid any unwanted crushing financial burden after buying a home.