Uncategorized January 11, 2025

Thinking of Buying Your First Home? Here’s What You Need to Know

Navigating Today’s Housing Market

Thinking of buying your first home, but it seems out of reach given the current housing market? You’re not alone. While this guide primarily addresses first-time homebuyers, it also applies to sellers looking to relocate due to work, be closer to family, change neighborhoods, need additional space for a growing family, or downsize.

How do I know? Because I’m in the same boat. As someone looking to relocate to be closer to family and grandchildren—and as a realtor—I have firsthand experience navigating the ever-changing market. Over the last 3–5 years, I’ve seen shifts in market trends, inventory levels, price increases, and interest rates that impact homebuying decisions.

Understanding Market Trends
Market trends vary by state and county. In my MLS (Multiple Listing Service) service area—including Philadelphia, Central PA, Baltimore, MD/WV Panhandle, Del/Mar Coastal, Southern MD, MD Eastern Shore, and North Central VA—the latest reports show a decrease in property showings compared to the same time in 2024.
For the week ending February 9, 2025, there were 69,960 showings in this MLS area. Except for one week this year, 2025 has consistently had the lowest showing levels in the past five years. Showings are down 14.6% from last year, as buyers face affordability challenges due to high list prices and mortgage rates averaging around 7%. The median list price is now $410,000, a 5.1% increase from last year. Additionally, contract times are slower, meaning buyers are taking longer to make purchasing decisions due to affordability constraints.
Competition and Challenges in Homebuying

In some cases, buyers have spent months—even over a year—searching for a home. While competition isn’t as fierce as during the height of the pandemic, it still exists, particularly for turnkey properties (move-in ready homes requiring no repairs). Buyers with cash offers often have an advantage over those needing financing or having a contingency to sell an existing property. Sellers prefer cash offers due to their speed and certainty.

These challenges can lead to disappointment and frustration, causing some buyers to pause their search in hopes that interest rates and home prices will drop. However, predicting the perfect market is impossible. When I bought my first home in 1985, interest rates were at 13%, but home prices were significantly lower.

The Best Time to Buy is When It’s Right for You

Rather than waiting for the “perfect” market, consider purchasing when it makes sense for your financial situation. If you find a home that meets most of your needs and fits your budget, it’s worth considering. You can always refinance in the future when interest rates decrease.

In real estate, we say, “Date the rate, marry the house.”
Evaluating Property Prices and Features

When searching for properties, it can be challenging to justify high listing prices, especially when homes have small square footage, outdated features, or need repairs. Work with your real estate agent to negotiate in these areas. Homes that require work tend to stay on the market longer, giving buyers more room to negotiate.

First-Time Buyers: Think of Your First Home as a Stepping Stone

Your first home doesn’t have to be your forever home. It’s a stepping stone. If you’re single or newly married, your housing needs may change over time. Instead of waiting for a home that checks every box, focus on one that meets your current needs.

For example, a home may lack a basement or garage but be in the perfect location, cutting down on commute time. In such cases, prioritizing location over amenities might make sense.

Considering a Fixer-Upper?

A fixer-upper can be an excellent way to enter the housing market at a lower price. Homes needing minor repairs—such as new flooring, paint, appliances, cabinets, or a roof—offer opportunities to build equity while adding your personal touch.

If you’re handy, you can tackle some projects yourself. Otherwise, hiring a licensed contractor ensures quality work. The key is prioritizing renovations over time to stay within budget. Be sure to invest in a location with increasing home values and desirable amenities like schools, parks, and shopping.

Home Inspections Are Essential

Before purchasing any property, hire a licensed home inspector. Knowing the condition of the home before finalizing the deal can save you from costly surprises down the road.

Expanding Your Search Area

If homes in your desired neighborhood exceed your budget, consider expanding your search to surrounding areas. You may find homes with more of your desired features at a lower price. Flexibility in location can open up more opportunities and better value.

Encouraging Trends for Buyers

There is some good news for buyers: Realtor.com reports that national median home prices have been flat or falling for 36 consecutive weeks since June 2024. Additionally, new listings are up 26.7% from the same period last year, meaning more options for buyers.

When supply grows faster than demand, homes stay on the market longer, increasing negotiating power for buyers. Sellers may be more flexible with asking prices, repairs, and concessions. If these conditions continue or improve, this spring could be a favorable time for first-time buyers to achieve their homeownership goals.
Homebuyer Assistance Programs

First-time buyers should explore local homebuying programs that assist with closing costs. Each state offers different programs, and the U.S. Department of Housing and Urban Development (HUD) website is a great resource. Your lender can also help identify loan programs that best fit your qualifications.

House Hunting Takes Time—Trust the Process

Buying a home can be an emotional rollercoaster. Some homes may not meet your expectations, and you may face competition for those that do. Give yourself time to find the right property. Avoid rushing into a decision that might lead to buyer’s remorse.

When you walk into the right home, you’ll know. Trust that moment.

Final Thoughts

The homebuying journey may be challenging, but with the right mindset, resources, and guidance, you can find a home that fits your needs and budget. Stay patient, explore your options, and rely on experts to help you navigate the process.

Happy house hunting!
– Cheryl