What first-time homebuyers need to know before entering today’s market

For Denver home sellers, the news isn’t great: There are more homes competing for buyers, and, according to Redfin.com, the median 2026 sale price is down 8.8% from last year.  

But what may be discouraging for sellers is good news for potential buyers. As more homes hit the Denver market, many first-time buyers may be considering whether homeownership is within reach. 

With the rising cost of living in Colorado and across the country, however, many young people still struggle to own a home. Experts at Metropolitan State University of Denver say there are strategies that can put homeownership within reach. 

It’s not just about money, it’s about timing 

Jeff Peshut, assistant professor of Finance at MSU Denver, says the first question prospective buyers should ask is not “Can I afford to buy a home?” but rather, “Does it make sense for me to buy a home right now?” 

“The most important factor is stability,” Peshut said. “Because of high upfront transaction costs, repair expenses and short-term market fluctuations, it generally only makes sense to buy a home if your life circumstances are stable and likely to remain that way for the next five to seven years.” 

Peshut added that many buyers focus too much on trying to “time the market.” Instead, the more important consideration is how long they plan to own the home. 

“If you plan to own the home for at least five to seven years, there’s plenty of time for short-term market fluctuations to recover,” he said. “That reduces the risk of having to sell during a soft market and losing money.” 

Buying a home today’ can be tough because of a combination of high home prices and mortgage interest rates and rising insurance costs. Even though sales have slowed, sellers have largely resisted lowering prices, keeping the market challenging for first-time buyers. 

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Andy Proctor, professor and director of the FHL Topeka Affordable Housing Institute at MSU Denver, recommends exploring programs designed to lower financing costs. 

The Colorado Housing and Finance Authority (CHFA) offers programs that can help with things like down payment assistance, lower-interest mortgage options and homebuyer education programs. 

“Many programs help buyers cover one of the biggest barriers to homeownership, the down payment,” Proctor said. “These programs allow buyers to finance a larger portion of the purchase price.” 

Proctor also suggests looking into alternative purchasing models. 

“Community land trusts and similar programs can provide lower-cost homeownership opportunities, especially for first-time buyers,” he said. 

These programs help keep housing prices lower by separating land ownership from the home purchase. 

If buying a home makes sense financially and personally, Peshut said, prospective buyers should remember one of the oldest rules in real estate: location matters. 

“The location is more important than the house itself,” Peshut said. “You can change many things about a house, but you can’t change its location.” 

Buyers should consider factors such as commute times, neighborhood safety, school quality and proximity to grocery stores, restaurants and other services. 

“Always buy in an area with the highest per-square-foot prices you can afford,” Peshut said. “Those locations tend to hold their value better over time.” 

One of the biggest challenges in the housing market today that there simply are not enough affordable homes available, particularly starter homes and condominiums. Until more housing is built, affordability will remain a challenge. 

For first-time buyers, understanding the full cost of homeownership is critical. That cost isn’t just the sale price, but also includes: 

• A down payment, typically 3% to 20% 

• Closing costs, usually 2% to 5% of the purchase price 

• Annual property taxes 

• Homeowners insurance 

• Private mortgage insurance, if applicable 

• HOA fees 

• Utilities, maintenance and repairs 

“Many first-time buyers underestimate ongoing maintenance costs,” Peshut said. 

He also cautioned buyers to be realistic about what they can afford. Lenders may approve borrowers for more than they should comfortably spend. 

A common guideline is to keep monthly housing costs between 28% and 30% of gross monthly income, with total debt between 36% and 43%. 

At the same time, homeownership can offer long-term financial benefits, including tax deductions tied to mortgage interest and property taxes, and the likelihood that the home’s value will increase, Peshut said. 

Homebuyer education programs help people understand how mortgages work, how to manage finances and how to navigate the homebuying process. 

“Education is one of the most effective tools for first-time buyers,” Proctor said. “These programs can make the process less intimidating and improve long-term financial stability.”