Key Takeaways
- Home sales have hit their lowest point since 1995, mainly due to affordability concerns.
- The average age for first-time homebuyers has increased to 40, reflecting changing life milestones.
- AI and virtual reality continue to redefine how buyers search for and evaluate properties.
- Joint homeownership, particularly buying with friends, is reshaping traditional home-buying models.
Navigating the home-buying process in 2026 presents both challenges and opportunities for prospective buyers. Driven by economic shifts, changing social patterns, and rapid technological advances, the path to homeownership looks very different from previous decades. Markets such as Mission Hills require the expertise of seasoned professionals, so partnering with local Mission Hills real estate agentscan make a significant difference in today’s competitive landscape.
With home sales at historic lows and affordability a central concern, buyers find themselves weighing new options and reevaluating their timelines. Modern tools such as artificial intelligence, virtual tours, and online resources are now essential in simplifying searches and guiding buyers through each step. By recognizing these trends and adopting a strategic approach, those entering the market can make informed decisions despite the complexity of the current environment.
Market Trends and Affordability
U.S. home sales continued their downward slide today, reaching levels not seen since 1995. Existing home sales declined by 0.7%, landing at 4.06 million for the year, as climbing mortgage rates, soaring home prices, and tight inventory kept many buyers sidelined. The national median sale price climbed yet again to an all-time high of $407,500, a 4.7% jump from the previous year. Mortgage rates peaked near 8% in late 2023, then hovered around 7%, dramatically reducing the purchasing power of would-be buyers. With only 1.15 million homes for sale nationally and demand far outstripping supply, upward price pressure remains strong.
The ongoing shortage stems from more than a decade of underbuilding and longer average homeownership durations. As a result, the percentage of first-time buyers has plummeted to just 24%, compared with a historical norm closer to 40%. Although a temporary dip in mortgage rates did trigger a slight uptick in late 2023 sales, most experts agree that normal sales volumes are unlikely to return before the next generation of homes is brought to market. According to The New York Times, the combination of these factors continues to challenge buyers nationwide.
Delayed Homeownership Among Millennials and Gen Z
Today’s average age for first-time homebuyers in the United States is 40, a historic high. Cities with high housing costs, such as Phoenix, amplify this trend, leading millennial and Gen Z adults to postpone purchasing in hopes of a future price drop. Data from July 2024 to June 2025 shows only 21% of home purchases went to first-time buyers, the lowest share since the early 1980s. Although in some markets both home prices and mortgage rates have inched down from their peaks, many would-be homeowners are instead opting for modern luxury rentals and purpose-built rental communities. Others are using the opportunity to build wealth through alternative investments rather than entering a competitive and costly housing market.
While some buyers remain optimistic about a potential market shift, professionals urge realistic expectations and readiness. As Christy Walker, president of the Phoenix Realtors, states, adjusting your outlook, rather than waiting for the “perfect” time to buy, can be key to entering the property market in 2026.
Technological Advancements in Home Buying
Technology has revolutionized every stage of the home-buying process. Artificial intelligence now powers advanced property search features, allowing users to narrow their options using natural language and detailed filters. Platforms such as Zillow have introduced AI-driven search capabilities that let buyers describe their ideal home as if texting a friend, resulting in more relevant listings and less time spent browsing. For sellers, AI identifies and showcases a home’s best features through optimized photos and immersive 3D tours, enabling buyers to get an authentic feel for the property remotely.
Other innovations include interactive floor plans and innovative pricing tools that leverage national market data to help buyers and sellers make confident decisions. The Zestimate, which employs deep learning to estimate current home values and predict local market trends, is one example of how these advancements provide greater transparency. As technology continues to evolve, buyers and sellers can expect increasingly streamlined processes and more engaging property experiences (CNBC).
Alternative Homeownership Models
Facing formidable financial barriers, a growing number of Americans are embracing new ownership models beyond the traditional single-family arrangement. One notable trend is the rise of co-buying with friends or non-romantic partners. This approach, highlighted in a 2024 TIME report, allows people to secure housing while splitting costs and building community support. Approximately 15% of U.S. adults have co-purchased with friends, a sign that shifting values and affordability challenges are changing what “family” and “home” mean in today’s society.
Companies like Open House Austin and innovative apps such as CoBuy now cater to this demographic, helping buyers navigate the complex legal and financial terrain. Those considering co-ownership are advised to establish thorough agreements defining responsibilities, exit plans, and investment distribution from the outset. With creative models gaining traction, future buyers can explore pathways previously considered unconventional.
Buyer Satisfaction and Market Cooling
Although affordability remains a challenge, buyer satisfaction has actually improved in the cooling market of 2026. Rates of post-purchase regret, especially overpaying, have dropped dramatically, falling from 15% in 2023 to just 8% in 2025, according to Realtor.com research. This trend reflects a more deliberate market, where homes remain listed longer, and buyers have more time to make considered decisions. In 2025, 37% of buyers reported no regrets about their purchase, up 6 points from just 2 years earlier.
With homes now sitting on the market for a median of 63 days, buyers are more likely to feel secure in their purchase and are less pressured to make snap decisions. Slower sales have created additional opportunities for research, negotiation, and professional advice, empowering buyers as they navigate the home-buying journey.
Future Outlook
The path forward in real estate is marked by persistent affordability risks but also by greater flexibility and opportunity. When used wisely, technological tools and alternative models create new avenues to homeownership that cater to evolving needs and values. By staying informed and tapping into experienced local agents, buyers can overcome uncertainty and pursue their goals with confidence.
