'Optimistic' First-Time Homebuyers Open to New Paths to Homeownership, According to TD Survey

Affordability pressures are driving aspiring homebuyers to make significant tradeoffs on their path to purchase, according to an annual TD Bank U.S. ("TD") survey of Americans planning to buy their first home in 2026. Nearly three-quarters (74%) of all respondents would consider using a 50-year mortgage if available, while 78% of younger millennials and 74% of Gen Z respondents would likely use their 401(k) to help purchase their first home if allowed. Fully half of first-time homebuyers surveyed would feel comfortable buying a fixer-upper in today's market.

"First-time homebuyers' desire and motivation to buy remains strong, and they are approaching their budgeting and financial boundaries with flexibility," said Steve Kaminski, Head of Residential Lending at TD Bank U.S. "They are open to various alternative approaches to make that first purchase possible amid elevated rates, broader economic uncertainty and limited inventory."

Nearly one-third of first-time homebuyers (31%) surveyed say they have reduced or stopped contributing to retirement accounts while saving for their home purchase. And while traditional guidance recommends people spend no more than 28% of their monthly income on mortgage payments, more than half of first-time homebuyers (54%) surveyed say they anticipate spending between 26% and 35%, up from 48% of homebuyers in 2025.

Even so, first-time homebuyers aren't backing down: 81% of respondents say they feel optimistic about the housing market this year, and an equal share believe homeownership remains a smart long-term investment.

Shifting Timelines, Same Aspirations

The timeline for homeownership is shifting for today's first-time homebuyers. According to the National Association of Realtors, the median age of a first-time homebuyer is 40. Gen Zers, however, are thinking earlier, with nearly half (46%) of respondents saying they expected to purchase their first home between 25 and 29.

Many first-time homebuyers also plan to lean on external financial support to make purchasing a home possible. Two-thirds (67%) of first-time homebuyers surveyed say they are receiving or planning to receive financial support from family or loved ones, rising to 76% among younger millennials and 70% among Gen Z respondents.

They're also preparing to own for the long-term, with nearly three out of five (58%) respondents expecting to live in their home for more than 10 years, up from 51% in 2025.

Credit as a Financial-Readiness Indicator

First-time homebuyers are increasingly focused on their credit report, using it as a tool to strengthen their financial foundation. Among those who are actively monitoring their credit report, many first-time buyers surveyed are looking to make improvements to their credit, including making on-time payments (70%, up from 60% in 2025), checking their credit reports for errors (59%, up from 44% in 2025) and paying down debt (57%, up from 51% in 2025).

On top of some proactively taking action to improve their credit scores, over half of first-time homebuyers (55%) surveyed have created a homeownership budget, also up from 48% in 2025. "This uptick signals an increased motivation to stay competitive in today's market," said Scott Lindner, National Sales Director at TD.

Guidance and Trusted Resources Remain Critical

While first-time homebuyers are taking more steps to financially prepare, they'd like to know more about what price range they can realistically afford (56%), how much home insurance and property taxes would cost (55%) and what's included in the closing costs (54%).

At the same time, many are not engaging with key financial resources, as only 27% of first-time homebuyers surveyed say they've spoken with a mortgage lender as part of the homebuying process. And only 22% of first-time homebuyers surveyed have secured pre-qualification or pre-approval, despite their ambitions to own in 2026.

"First-time homebuyers crave access to clear guidance and reliable advice, which is more important than ever in today's environment," said Lindner. "Meeting with a lender early in the process helps them better understand how they should structure their timeline, prepare their full financial picture, make a budget and assess other common costs in their region."

Five Top Tips: Navigating Homeownership and Mortgage Decisions as a First-Time Homebuyer

What mortgage options should I consider?

There are a variety of mortgage types to explore, including fixed- and adjustable-rate mortgages, low down payment options such as FHA loans and specialized programs like VA loans. A fixed-rate mortgage provides consistent monthly payments over the life of the loan, while an adjustable-rate mortgage may offer a lower initial rate that can change over time. Understanding how these options differ, along with your comfort with risk, income stability and long-term plans, can help you choose what best fits your needs.

How can I save for a down payment on a home?

Saving for a down payment starts with setting a clear goal and building a plan. Many buyers save regularly and adjust discretionary spending to stay on track. It's also important to explore available programs. Some loan options, including those offered by TD, may provide down payment support to those who qualify, helping make homeownership more accessible.

When is the right time to buy a home?

There's no one-size-fits-all answer. The right time to buy depends on your financial readiness, long-term goals and comfort with the responsibilities of homeownership. Personal preparedness matters just as much as market conditions.

When should I meet with a bank or mortgage lender?

It is best to connect with a bank or mortgage lender as early as possible in the homebuying process. Doing so can help you understand how much financing you qualify for, so you can explore your options and plan ahead with greater confidence.

How can I prepare for the mortgage application process?

Preparing in advance can help streamline your application and reduce potential delays. This may include reviewing your credit, avoiding taking on new debt and gathering key financial documents such as pay stubs, bank statements and tax information.

Survey Methodology

This CARAVAN survey was conducted by Big Village among a sample of 1,003 U.S. adults who have never owned a house and plan to buy their first home this year (in 2026). Half of the respondents (N=501) reside in the following states: Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut, New York, New Jersey, Pennsylvania, Delaware, Maryland, District of Columbia, Virginia, North Carolina, South Carolina, and Florida. In addition, 255 interviews were conducted among low- to moderate-income respondents, defined on a per-state basis as having household income within 50% to 80% of the median family income for that state.

About TD Bank U.S.

TD Bank US Holding Company and its subsidiaries, including TD Bank, N.A., are collectively known as TD Bank U.S. As the U.S. banking business of The Toronto-Dominion Bank (TSX and NYSE:TD), a leading North American financial services firm, TD Bank U.S. serves more than 10 million clients and has a network of approximately 1,050 locations throughout the Northeast, Mid-Atlantic, Carolinas and Florida. We support our clients and communities with a full range of retail, small business, and commercial banking products and services. We also offer customized private banking and wealth management services, a comprehensive suite of credit card products for consumers and businesses, and automotive vehicle financing and dealer commercial services. TD Bank U.S. is one of the largest banks in the U.S. by assets and is headquartered in Mount Laurel, N.J. To learn more, visit www.td.com/us.

About Big Village

A Bright Mountain company, Big Village is a modern business intelligence partner with a long and storied history in the insights industry. Big Village is a research and analytics business that helps brands and agencies to better understand customer behavior, intentions, and attitudes to drive effective marketing and innovation. We provide fast-track learning and human-led decision support to help brands genuinely commit to knowing their customers and succeed. Known for decades as Opinion Research Corporation (ORC), we have over 80 years of experience in delivering high-quality data and insights. Today, we design, build, and manage consumer insights projects and programs that enable always-on learning and generate growth for brands. Find out more at https://big-village.com.

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Nicole Constantine

nicole.constantine@td.com

856-904-5503