First-time homebuyers are growing increasingly confident in their ability to navigate a challenging and unpredictable housing market, exhibiting savvy negotiation tactics and a willingness to make strategic compromises. Yet, even as they take a more empowered approach to purchasing property, a major hurdle continues to stand in the way of many prospective buyers taking the final leap into homeownership: sellers need to bring home prices down.
A recent survey conducted by Neighbors Bank, which polled individuals currently searching for their first home or who have purchased one within the past year, reveals that first-time buyers are making highly informed decisions. Rather than rushing blindly into competitive bidding wars, these buyers are actively negotiating, walking away from deals when terms are unfavorable, and making calculated concessions to secure a home that fits within their financial reality.
When it comes to the specific strategies that would successfully woo these hesitant purchasers, 40% of survey respondents indicated that a direct price reduction is the single most impactful seller concession. Such a move, they noted, would drastically boost their confidence to move forward with a purchase in the current economic climate.
This desire for lower prices aligns with broader national housing trends. In September, the national median list price for homes across the United States stood at $419,250, according to data from Realtor.com. This figure represented a 1.4% decrease compared with the same period last year, marking an 11th consecutive month of year-over-year price declines. While listing prices are slowly creeping downward, many buyers still feel that sellers need to do more to sweeten the pot before they feel comfortable committing their hard-earned savings.
The Neighbors Bank survey highlights a striking shift in buyer mindset, revealing that 86% of first-time buyers feel entirely comfortable making an offer below a home’s asking price. Furthermore, 57% of respondents reported having walked away from a prospective home purchase simply because they felt they possessed the negotiating power and the confidence to do so. After years of navigating a historically difficult and restrictive market, a new wave of buyers is finding its voice and demanding the deals they want.
Beyond straightforward price cuts, buyers are also recognizing that there are multiple financial avenues available to reduce their long-term housing costs. Up to 83% of surveyed buyers indicated they would readily accept a mortgage interest rate buydown funded by a seller or a builder. In addition, prospective buyers increasingly expect sellers to handle necessary home repairs prior to closing and to provide financial assistance with closing costs to significantly lower the amount of cash required upfront.
Mortgage rates, however, remain a formidable and persistent obstacle for many households. Roughly 70% of survey respondents reported that current interest rates make every available housing option feel completely out of reach. Despite this widespread sentiment, Neighbors Bank emphasizes that prospective buyers should look beyond the headline-grabbing mortgage rates when evaluating their purchasing power. Factors such as an individual’s credit history, chosen loan type, down payment amount, and accessible seller concessions all play a critical role in determining what a buyer’s actual, personalized mortgage rate will turn out to be.
Moreover, sitting on the sidelines and waiting specifically for headline mortgage rates to drop comes with its own set of distinct financial risks. In the interim, home prices could easily rise again, or the broader market could suddenly become flooded with an influx of eager, competing buyers the moment rates begin to tick downward.
Data from the Neighbors Bank report shows that more than a quarter of first-time buyers are acutely aware of this hidden risk, noting that their single biggest fear is waiting too long to buy, only to reenter the market and watch home prices climb out of reach once again.
Because home prices, mortgage rates, available housing inventory, and other macroeconomic factors are constantly in flux, attempting to perfectly time the housing market is an exceptionally difficult endeavor, according to Bob Curtis, founder and CEO of GetWyz.
"The bottom line: Don’t buy a home because you think rates are about to go up, and don’t postpone buying solely because you think rates are about to come down," Curtis tells Realtor.com. "Buy when you find the right home and can comfortably afford the total cost of owning it."
In their quest to find the right home at a price they can comfortably afford, today’s buyers are increasingly willing to expand their geographical search parameters. Nearly 90% of prospective buyers report that they are completely open to purchasing a property located outside of a major metropolitan area in order to secure a more affordable price point. In addition, buyers are exploring alternative neighborhoods and considering smaller floor plans as effective strategies to increase overall housing affordability.
Ben Mizes, an active real estate agent and investor based in St. Louis, observes that first-time buyers are displaying a markedly higher degree of financial awareness than in previous years.
"Rather than spending their budgets on the best house and backyard, they are looking farther away at smaller houses. They are doing more research on houses that can be improved with minor changes," Mizes tells Realtor.com. "Many people are deciding that they can live with a house that doesn’t have all of the ideal features rather than saving to buy a house for another 10 years."
Once these determined buyers successfully locate their desired property, many are finding fruitful results by asking the seller for strategic concessions to pull the final transaction down into an attainable price range, Mizes adds.
Even as first-time buyers demonstrate resilience and resourcefulness, the emotional and financial weight of the process remains heavy. Approximately 69% of respondents told Neighbors Bank that every single homebuying decision feels perilous, carrying the distinct anxiety that they might get it wrong. Nevertheless, they continue to make pragmatic choices, making necessary sacrifices and leveraging their negotiating power to secure the right home at the right price.
