First-time homebuyers are ‘optimistic,’ open to new paths to homeownership
TD reports that first-time homebuyers remain optimistic despite affordability challenges, exploring alternative
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First-time homebuyers are ‘optimistic,’ open to new paths to homeownership
Affordability pressures are driving aspiring homebuyers to make significant tradeoffs on their path to purchase, according to an annual TD survey of Americans planning to buy their first home in 2026. With elevated interest rates, broader economic uncertainty, and limited inventory, first-time buyers are increasingly open to non-traditional financing and finding alternative funding sources to make homeownership a reality.
Based on the survey of 1,003 U.S. adults who have never owned a house and plan to buy their first home in 2026, first-time homebuyers would consider the following financial strategies:
- Seventy-four percent would consider a 50-year mortgage.
- Seventy-eight percent of younger millennials and 74% of Gen Z would use their 401(k) for a home purchase if allowed.
- Fifty percent would buy a fixer-upper.
- Sixty-seven percent plan to receive financial support from family/loved ones (higher for younger millennials and Gen Z).
As TD reports, first-time homebuyers are making financial sacrifices and focusing on budgeting to purchase a home.
- Interest rates (29%) and affordability (28%) are the top barriers to purchasing a home for first-time buyers.
- Thirty-one percent have reduced or stopped contributing to retirement accounts.
- Fifty-four percent anticipate spending between 26% and 35% of their monthly income on mortgage payments (up from 48% in 2025).
Optimism, but on a delayed timeline
A majority (81%) of first-time homebuyers remain optimistic about the market, and they are not backing down.
However, the timeline for homeownership is shifting for today’s first-time homebuyers.
- Median age for first-time buyers is 40, but Gen Z aims for younger ages (46% expect to buy between 25-29).
- Eighty-one percent believe homeownership is a smart long-term investment.
- Fifty-eight percent expect to live in their home for more than 10 years (up from 51% in 2025).
Credit as a financial-readiness indicator
First-time homebuyers are preparing more deliberately for their purchase than in previous years, taking steps to improve financial readiness and plan ahead. Many are increasingly focused on their credit report, using it as a tool to strengthen their financial foundation.
Buyers are actively monitoring and improving their credit by making on-time payments (70%), checking for errors (59%), and paying down debt (57%). Fifty-five percent have created a homeownership budget (up from 48% in 2025).
Guidance and trusted resources remain critical
Many first-time homebuyers said they need greater clarity on the home purchase process, highlighting the growing complexity of navigating today’s market.
Buyers want more information on affordability, insurance, property taxes, and closing costs. Only 27% have spoken with a mortgage lender; only 22% have secured pre-qualification/pre-approval.
Survey Methodology
This CARAVAN survey was conducted by Big Village among a sample of 1,003 U.S. adults who have never owned a house and plan to buy their first home in 2026. Half of the respondents (N=501) reside in the following states: Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut, New York, New Jersey, Pennsylvania, Delaware, Maryland, District of Columbia, Virginia, North Carolina, South Carolina, and Florida. In addition, 255 interviews were conducted among low- to moderate-income respondents, defined on a per-state basis as having household income within 50% to 80% of the median family income for that state.
This story was produced by TD and reviewed and distributed by Stacker.
