Thinking About Buying Your First Home in 2026? Read This First

If you are considering purchasing your first home in Soquel in 2026, you may be experiencing a mix of emotions. Excitement, nervousness, and perhaps even a bit of frustration or embarrassment about still renting are common feelings among first-time buyers.

Many first-time buyers in Soquel and the surrounding areas share this sentiment. The past few years have been challenging. Home prices surged, interest rates increased, rents remained high, and various financial pressures such as student loans and childcare costs continued to rise. It may have felt like the goalposts kept moving further away.

According to the National Association of REALTORS®, first-time buyers constituted only about 21 percent of the market last year, marking the lowest percentage recorded. The average age of a first-time buyer has now reached 40.

This trend does not indicate a lack of interest in homeownership. Instead, it reflects the reality that many potential buyers have been compelled to delay their plans.

The downside of waiting is significant. NAR estimates that postponing a home purchase by ten years could result in a loss of approximately $150,000 in potential equity on a typical starter home. This figure can be surprising, but it accumulates more quickly than many people anticipate.

So, as you look ahead to 2026, the question should not be whether you missed your chance. Instead, it should be whether this is finally a market where you can move forward without feeling overwhelmed.

For many buyers, the answer is yes.

It is important to acknowledge that the housing market is not suddenly easy. However, it is calmer than it has been in recent years.

Interest rates are expected to hover around the 6 percent mark for most of 2026, and inventory levels are gradually improving. Sellers are becoming more open to negotiations, and the pace of price growth has slowed compared to previous years.

While this may not seem thrilling, it is crucial. A calmer market provides first-time buyers with something they have lacked recently: time. You will have the opportunity to think things through and ask questions without the pressure of losing a property within minutes.

Many first-time buyers tend to focus heavily on mortgage rates. This is understandable, as rates impact monthly payments and dominate news coverage.

However, concentrating solely on rates can lead to unnecessary delays in your decision-making process. It is essential to remember that purchasing a home involves more than just the interest rate.

Factors such as home price, seller credits, closing costs, loan structure, and future refinance options all play significant roles in the overall decision. In a market like that of 2026, buyers often find more flexibility than they realize. Some sellers may be willing to contribute to closing costs, while certain builders might offer rate buydowns. Various loan options can also help reduce initial payments.

A slightly higher rate combined with the right loan structure can sometimes place you in a better position than waiting indefinitely for the ideal rate.

Saving for a down payment remains a significant hurdle for most first-time buyers, and that hasn’t changed.

Many individuals mistakenly believe that they need to put down 10 or 20 percent of the home price. In reality, numerous first-time buyers qualify with considerably less. Some conventional loans require as little as 3 percent down, while FHA loans typically ask for around 3.5 percent. Additionally, VA and USDA loans may offer zero down payment options for eligible borrowers.

There are also assistance programs and grants available, but many people are unaware of these options because they do not consult with a lender early in the process.

This is a common misstep for first-time buyers: waiting to “be ready” before seeking information. Early education can often reveal options sooner than expected.

Another trend worth noting is the increasing flexibility available to buyers.

Some first-time buyers are opting for adjustable-rate mortgages, understanding that they may not stay in their homes long-term. Others are leveraging builder incentives to temporarily lower payments during the initial years of homeownership.

These alternatives may not suit everyone, and they do come with trade-offs. However, they exist and can help the right buyer enter the market sooner without overextending their finances.

This aspect may come as a surprise to many.

Builders are currently motivated to sell, and many are offering price reductions, closing cost credits, or rate buydowns. Additionally, there has been a notable increase in the construction of townhomes, creating more entry-level options.

In certain cases, new construction can actually be more affordable than older resale homes when considering these incentives.

Prepared buyers are usually the first to recognize these opportunities.

Every market has its unique dynamics.

At this time, being prepared is more important than being quick.

Preparation involves more than just obtaining pre-approval. It means understanding your financial situation, knowing your comfort zone, and having a plan in place before the right home becomes available.

Successful buyers often start their journey earlier than they think they need to. This approach does not mean rushing; rather, it reflects a desire to avoid last-minute scrambling.

Many lenders focus solely on getting you to closing. Once that is accomplished, the relationship often ends.

At NEO, we take a more comprehensive approach.

With our Mortgage Under Management program, we continue to work with you post-purchase. We monitor interest rates, track your equity, and adapt strategies as your circumstances evolve. This is particularly valuable for first-time buyers, as the early years of homeownership significantly influence future outcomes.

Your first home is not just a transaction; it marks the beginning of your financial journey.

There is no one-size-fits-all answer.

However, 2026 presents a balance that has been absent for some time. With more options available, less chaos, and additional room for planning, this could be a favorable time for many buyers.

You do not need to wait for the perfect moment. What you need is clarity and a knowledgeable guide to help you think long-term.

Purchasing your first home should not feel rushed or intimidating.

At NEO Home Loans powered by Better, we are here to assist you in understanding what is realistic, what is possible, and what aligns with your goals.

If homeownership is on your radar for this year, the best first step is not filling out an application.

It is discussing your plan with us.

When you are ready, we are here to help.