By most accounts, 2025 was a challenging year for first-time homebuyers. Between rising home prices, lower inventory, elevated interest rates, and record-high down payments, first-time homebuyers accounted for only 21% of the market.
That’s historically low, as first-time buyers typically account for about 40% of the market. Unfortunately, in recent years, younger buyers with debt or lower credit scores have struggled to pursue the American dream of home ownership. Will 2026 be a better year for affordability and mortgage rates? We think so, and here’s why:
Reason #1: Mortgage Rates are Coming Down
Although rates always vary by lender and loan type, today’s average mortgage rates for a 30-year mortgage are around 6.06%, as compared to last year at this time, when rates were roughly 7.04%. That’s the lowest rate in the past three years. It’s a promising sign and will likely boost buyer activity.
In fact, according to research from the National Association of REALTORS research, even a 1% drop in rates could bring more than 1 million current renters into the pool of potential buyers.
Reason #2: Inventory is Increasing
When mortgage rates drop and reduce overall housing costs, more buyers will be able to afford monthly payments and may finally be able to enter the housing market. It can also lead to a greater incentive for current homeowners to sell, which can increase the number of houses on the market and drive up competition. And that can lead to an upward swing in the housing market in general, which is great news.
Although inventory hasn’t yet rebounded to pre-pandemic levels—it’s forecasted to still be about 12% below pre-2020 averages at year’s end—there is a projected growth predicted between 5-15% in the number of active listings. That’s exciting for first-time buyers who can anticipate more choices, more negotiating power, and more stable home price growth.
Reason #3: More Financing Options Than Ever
For many first-time buyers, especially those with lower credit scores and higher debt, securing a conventional bank loan for a mortgage can feel out of reach. But there are other loan options, like those provided by Housing Finance Agencies (HFAs), that can make home ownership a reality. These state-run organizations can connect qualified buyers with programs that reduce down payments, help with closing costs, and even provide homebuyer education to walk first-time buyers through the fairly complicated process of buying a home.
Every state has an HFA that supports affordable housing initiatives. These organizations work with private lenders and the two government-sponsored entities—Fannie Mae and Freddie Mac—to design and distribute loans for low- to moderate-income homebuyers.
Many people don’t even know these programs exist (!) but they’re making homeownership accessible for an important population of would-be first time buyers.
Learn more about HFAs can help you make home ownership a reality.
Reason #4: Technology is Making the Process Smoother
For a number of years, property listing websites have been steadily enhancing and optimizing online listings to provide comprehensive virtual tours and 3D walkthroughs, allowing buyers from anywhere to experience something pretty darn close to physically exploring an available home.
But technology on the backend of the home buying process has been improving, too. Online applications and pre-approvals are easier to access than ever before, with results in minutes instead of days or weeks. Realtors can secure e-signatures and send online disclosures, reducing paperwork and friction between steps of the process.
Recently, EverDwell launched a digital platform to support state HFAs by organizing and streamlining their processes, connecting more qualified homebuyers to loan officers quickly and efficiently.
Reason #5: Homeowning is Still the American Dream
Even with upfront costs and conditions, buying a home is still one of the best ways to build equity and wealth in this country. It provides stability, more predictable monthly expenses, and the freedom that comes with having an investment that can be passed down to future generations.
A recent study from Realtor.com found that three out of four Americans still believe that home ownership is part of the American dream, and 59% feel it’s achievable. Here’s hoping 2026 is the year more first-time homebuyers are able to take their first step toward making it happen.
At EverDwell, we think first-time home ownership is accessible for most and our partnerships with state HFAs help make more homeowners out of homebuyers. Our digital platform captures potential buyer information, connects approved loan officers with qualified leads, and streamlines HFA operations from Quick Check to closing. Are you an HFA ready to increase loan volume and experience sustainable growth?
