Here’s What First-Time Buyers Really Want in 2025

SOURCE: Realtor.com

When we set out to explore what first-time homebuyers want in 2025, we expected a long list of must-haves: spacious layouts, modern upgrades, and even backyard amenities. But after speaking with agents and house hunters, the answer was far simpler. They just want a place to call their own.

“Not their parents' basement or an expensive rental that offers no real amenities and no equity,” says Thomas McCormack, senior partner and broker with Resources Real Estate in New Jersey. “They want a new home. OK, maybe not new. Maybe just a home.”

While affordability may be their top concern, first-time homebuyers are looking for more than a cheap price tag. They want a house that will save them money in the short and long term.

Affordability

Only 24% of homebuyers in 2024 were purchasing their first home, according to the National Association of Realtors®—the lowest percentage on record.

“First-time homebuyers have been stuck in a corner for quite some time now, faced with higher and higher prices, higher and higher mortgage rates, limited inventory, and steep competition from down-sizing empty nesters with a lot of equity,” says McCormack.

These headwinds have made affordability the primary concern of first-timers in 2025. 

To adjust, first-time buyers are changing their expectations, considering smaller homes, relocating to more affordable markets, or seeking down payment assistance. Programs like FHA loans, first-time buyer grants, and state-level initiatives have become crucial lifelines, helping some navigate the financial hurdles of the current market.

Move-in ready or bust

First-time homebuyers "like to see a home and imagine what it would be like to live there,” says Alexei Morgado, an agent based in Florida.

For many newbies, that vision doesn’t include a fixer-upper.

“Remodeling a home is hard work and comes with several inconveniences. Most of the time, it takes upfront money to pay for repairs, and everyone hates it when dust gets everywhere,” says Morgado.

That means first-timers are prioritizing turnkey properties in 2025. Many can’t afford to take on expensive renovations after sinking all their savings into a down payment and closing costs. So buying move-in ready is less of a preference and more of a necessity.

Modern kitchens, updated bathrooms, and fresh finishes are the green light these buyers are looking for.

Energy efficiency

First-time house hunters trend younger than seasoned homebuyers, and their preferences reflect that. As millennials and Gen Z make up a growing share of the market, they’re prioritizing energy-efficient home upgrades for sustainability and savings.

“Buyers are really into energy-efficient features like smart thermostats, LED lighting, and even solar panels,” says Mike Roberts, a mortgage broker and co-founder of City Creek Mortgage in Utah.

These upgrades aren’t just a matter of taste, they’re also practical.

“They lower utility bills, and they also add a modern touch that resonates with today’s eco-conscious mindset,” says Roberts.

With rising energy costs and tax incentives for green home improvements, first-time buyers see these features as both an investment and a way to reduce monthly expenses. High-efficiency windows, Energy Star–rated appliances, and improved insulation are also becoming key selling points, making move-in-ready homes with these upgrades even more appealing.

Multigenerational homes

As much as first-timers would like a place of their own, few can afford one alone. Starter homes have ballooned in price, making these simple, no-frills homes a relic of a distant past. To compensate, newbie homebuyers are teaming up with their families to buy houses that can comfortably accommodate multiple generations.

In 2024, 17% of home sales were for multigenerational abodes, according to NAR data. As mortgage rates remain stubbornly high, inventory remains constricted, and older generations like boomers stubbornly hang on to $84 trillion of wealth and 38% of current housing stock, we’re likely to see more first-timers partner with equity-rich family members to buy their first home.

What first-timers should be looking for

It’s understandable that first-time homebuyers are laser-focused on affordability, but they risk getting tunnel vision if they’re not careful.

Even move-in ready homes can come with costly repairs if buyers don’t know what to look out for.

“They’ll look at the roof, but they do not always think to check the age of the AC unit, to go into the attic to check if the wood is good," says Dylan Calvo, an agent based in Nashville, TN.

To avoid getting stuck with a lemon, do your due diligence before buying. Hire a home inspector to thoroughly inspect the premises, negotiate any necessary repairs with the sellers, look into the HOA to ensure you understand their financial situation and your obligations—and don’t forget to check if the house is vulnerable to natural disasters.

“For any house you are considering buying, you should ask your Realtor® if the home is in a flood zone and if flood insurance is required. You can even check on your state's website yourself for FEMA flood maps,” says Calvo.

Flood insurance costs an average of $1,000 to $2,000 per year, and home insurance premiums can skyrocket after a natural disaster, both of which can take a huge toll on household budgets.

In addition to understanding your home’s flood risk, use FEMA resources to understand your home’s vulnerability to tornadoes, hurricanes, and wildfires.

Haven’t found The One yet? Don’t worry

Home prices are finally cooling, promising an answer to the only thing on first-timers' minds: affordability.

“We are seeing in some areas double the monthly supply compared to last year, and for the past three months we have been saving each client about $10,000 in negotiations either through asking the seller to pay closing costs or asking to lower house sale price,” says Calvo.

While house prices inch down, Roberts recommends using this time to understand your financial comfort zone, get pre-approved for a mortgage, and gather all your necessary paperwork (like recent tax returns, W2s, employment verification letters, etc.). Though prices are softening, competition remains, especially for well-priced homes in desirable neighborhoods.

The shifting market presents an opportunity to first-timers, but you’ll need to be prepared.

SOURCE: Realtor.com