Will It Be Easier For First-Time Homebuyers to Jump into the Market in 2026?

Key Takeaways

• The affordability challenges that first-time homebuyers have been facing aren’t likely to improve much in 2026.
• Mortgage rates are expected to continue to hover around 6%, while home prices are likely to rise by 4%, according to the National Association of Realtors.

The housing market has become a challenging environment for individuals seeking to purchase their first home. And in 2026, conditions don’t look like they will improve much.

High housing costs and interest rates have served as a barrier for many looking to buy a house, but especially those looking to buy their first home. In fact, National Association of Realtors data showed that just 21% of homes sold in the period between July 2024 and June 2025 went to first-time homebuyers, the lowest July-to-June-annual share for the group dating back to 1981. Not only that, the average age of first-time homebuyers is now 40 years, a decade older than in 2010.

Why This Matters for You

Even with slightly lower mortgage rates in 2026, high home prices and other living expenses mean that buying your first home will still be tough. But pent-up demand and major life events could push many to buy anyway—fueling competition and keeping prices high.

“First-time home buyers are older, likely because they have to save for longer periods and face a market with limited inventory, where they may have to search longer to find a home,” the National Association of Realtors report showed.

Affordability Problems Likely to Continue for First-Time Homebuyers

Homebuyers have been beset with a slew of affordability problems that have kept housing sales at decades-low levels. For starters, mortgage rates have been historically elevated despite falling somewhat since the start of 2025. They remained well above 6% in 2025, making it hard for buyers to afford the borrowing costs. High interest rates have done little to help lower housing costs, which continue to rise. 

While some conditions are expected to improve in 2026, first-time homebuyers will likely still be facing a housing market that continues to challenge affordability. 

NAR Chief Economist Lawrence Yun projected that mortgage rates would decline modestly in 2026, averaging around 6%. That's a slight improvement from the 6.26% that home borrowers faced in late 2025. Similarly, mortgage lending giant Fannie Mae projects that mortgage rates will hover in that range until the final quarter of 2026, when they are forecast to drop to 5.9%.

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"As we go into next year, the mortgage rate will be a little bit better," said Yun. "It's not going to be a big decline, but it will be a modest decline that will improve affordability."

That extra help on mortgage rates is likely to reignite home sales, Yun said, which are expected to grow by about 14% in 2026 after several years of low sales. The increase in sales is expected to ignite more competition among buyers, which is expected to push home prices higher by about 4%.

"Next year is really the year that we will see a measurable increase in sales," Yun said. "Home prices nationwide are in no danger of declining."

First-Time Homebuyers Having Trouble Saving

While the cost of housing is standing in the way for some first-time homebuyers, so are life’s other expenses, which can make it more difficult for buyers to save, especially when they don’t have home equity to rely on. NAR Deputy Chief Economist Jessica Lautz said high rent payments and student loan debt are keeping many first-time homebuyers from getting into the housing market.

"The biggest struggle first-time buyers have is finding an affordable property, and many of them struggle to save for a down payment," said Lautz.

Life Events May Force Home Purchases Higher 

However, while prices are likely to remain relatively high for first-time homebuyers, many may have to absorb the costs as life events force them to buy a home, wrote First American Deputy Chief Economist Odeta Kushi.

She noted that between 2022 and 2025, home sales were short by 4 million compared with historical averages. Additionally, there were 52 million Americans in their thirties, with many still not owning a home.

“There is still significant pent-up demand among first-time and repeat buyers,” wrote Kushi. “Even if mortgage rates stay in the low-6% range, weddings and separations, growing families, job moves, caregiving, and downsizing will continue to drive sales activity. Transactions grind higher as 2026 unfolds because life, and life events, keep happening.”

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