Thinking about buying your first home? New data shows starter homes are lingering on the market, price cuts are increasing and first-time buyers finally have more negotiating power.
For years, buying a starter home has felt hyper competitive. Homes were quickly snapped up, bidding wars pushed prices higher, and first-time buyers often found themselves competing against investors with cash offers.
But if you're wondering if now is the right time to buy a house, the market may finally be tilting back in first-time buyers' favor.
New data shows that while luxury homes continue to attract strong demand, the starter-home market is slowing. More entry-level homes are available, price cuts are becoming more common, and bidding wars are easing—all signs that buyers have more leverage than they've had in recent years.
First-time buyers have more room to negotiate today than they did in 2021 or 2022, experts say.
The biggest advantage right now, is that the market is more balanced.
Buyers aren't always competing against 15 offers the first weekend. They have more time to think, compare properties, run the numbers, and negotiate.
Still, well-priced, high-quality homes are still moving quickly. "But if a property has been sitting, is overpriced, or needs work, buyers have significantly more leverage than they did during the pandemic market.
Today's market doesn't necessarily mean buying a home has become easy, though. Mortgage rates remain elevated (averaging 6.6% on 30-year mortgages), inflation continues to squeeze household budgets, and many would-be buyers are still struggling to save for a down payment. But if you've been waiting for a less competitive market to enter the homebuying market, today's conditions may offer an opening.
Starter homes are sitting longer
A starter home is one that falls between the 5th and 35th percentile of home values in its local market. The typical starter home nationwide is worth about $202,000, which is 2.3% higher than it was a year ago.
Nationwide inventory of starter homes increased 4.5% compared with a year ago, giving buyers more options to choose from.
At the same time, one in four starter-home listings reduced its asking price in June. While about 25% of starter homes saw a price cut, compared with 20.6% of luxury listings.
Those numbers suggest sellers are becoming more willing to negotiate instead of expecting multiple offers above asking price.
"The best time to buy a home is when nobody else wants to.
Today's buyers have more negotiating power and more inventory to choose from than they've had in recent years, even as broader economic pressures continue to make homeownership a challenge for many households.
At the start of August 2026, average interest rates on a 30-year fixed mortgage are 6.79%.
That has some first-time buyers are waiting for rates to fall, but timing the market rarely works.
If the home fits your budget today, you can always refinance if rates come down. Waiting could mean more competition and higher home prices, offsetting any savings from lower rates.