The process of purchasing a home, particularly for first-time buyers, can be stressful and confusing. And buyers in today’s market may feel the odds are stacked higher against them.
Simply finding a home is the first challenge: The US housing market is short 6.5 million homes, according to an analysis by Realtor.com, and in many major US cities, inventory is at record lows. But even for buyers who can find their dream home, affording it is tougher than ever. Since 2021, federal interest rates have jumped more than 3 percentage points, and mortgages have climbed in tandem. With a 20 percent down payment, a monthly mortgage bill for a $425,000 house is now about $2,573, up from $1,772 just a few years ago.
There are also more all-cash buyers purchasing homes now than ever before, so even well-qualified buyers with excellent credit are finding it difficult to compete.
In a series of articles over the next few months, The New York Times will guide readers through every stage of the home buying process, from searching for the right home to closing the deal.
Along the way, you’ll encounter real estate jargon that can be difficult to understand. So before we dive in, let’s review the lingo. The stronger your grasp, the better prepared you’ll be to conquer (or at least navigate) the housing market.
How does your knowledge stack up? Take our quiz and find out.