2026 Is One of the Best Years to Buy Your First Home — If You're Prepared
First-time homebuyers have been squeezed for the better part of four years by a combination of rising rates, scarce inventory, and aggressive competition from cash-heavy buyers. But the landscape is different now.
According to Investopedia's 2026 market analysis, we're seeing a shift toward a buyer's market with increased inventory and stabilizing prices. Nationally, the typical mortgage payment as a share of income is falling below 30% for the first time since 2022, according to Realtor.com.
Here are seven strategies that will give you a real edge.
1. Get Fully Underwritten — Not Just Pre-Qualified
A pre-qualification letter is a starting point. A full underwriting approval is a weapon.
When your loan has been fully underwritten before you make an offer, sellers know there's minimal risk of financing falling through. In a market where homes still receive multiple offers in desirable neighborhoods, this distinction can be the difference between winning and losing.
Action step: Start the full mortgage application process 60-90 days before you plan to start house hunting. This gives time to resolve any credit issues, gather documentation, and lock your rate when conditions are favorable.
2. Buy in the Off-Season (Right Now)
Winter and early spring remain the best time to buy in Colorado. You're competing against fewer buyers, sellers are often more motivated, and prices tend to be lower than peak summer months.
The Mortgage Reports notes that Q1 offers particular advantages — less competition post-holidays and lower prices compared to the spring and summer frenzy.
Action step: Set up property alerts now for your target neighborhoods and price range. Be ready to tour and make offers within 24-48 hours of a new listing.
3. Target Your Credit Score to 720+
Your credit score has the single biggest impact on the interest rate you'll pay — and over a 30-year mortgage, even a 0.25% difference adds up to tens of thousands of dollars.
- 740+: Best available rates
- 720-739: Near-best rates, minimal premium
- 680-719: Good rates, small premium
- Below 680: Higher rates, consider FHA
Action step: Check your credit report at AnnualCreditReport.com (free, no impact on score). Pay down credit card balances to below 30% utilization, and avoid opening new accounts in the months before applying.
4. Stack Down Payment Assistance Programs
Colorado offers some of the country's best down payment assistance programs, and many can be combined:
- CHFA programs: Up to 3% of the loan amount in down payment assistance — available as a grant or forgivable second mortgage
- Local workforce housing programs: Available in mountain communities and some Front Range cities
- FHA + CHFA combination: 3.5% down with assistance covering most or all of it
- VA loans: $0 down for eligible veterans and active military
Action step: Ask Cedar Home Loans about CHFA eligibility — we're an approved CHFA lender and can walk you through which programs you qualify for.
5. Consider an Adjustable-Rate Mortgage (ARM)
ARMs have gotten a bad reputation from the 2008 crisis, but today's ARM products are fundamentally different — with rate caps, longer initial fixed periods, and stronger consumer protections.
A 5/1 or 7/1 ARM can offer rates 0.5-1% lower than a 30-year fixed. If you plan to sell, refinance, or pay down significantly within 5-7 years, the savings can be substantial.
As Investopedia reports, ARMs are gaining popularity among first-time buyers who expect to either move up or refinance as rates continue to ease in coming years.
6. Negotiate Like the Market Has Changed — Because It Has
With homes sitting on the market for 56 days in Denver Metro (up from 41 last year), you have leverage that didn't exist in 2022-2024:
- Request seller concessions toward closing costs (up to 3-6% of purchase price)
- Ask for a home warranty — sellers are more willing to include them
- Don't waive inspections — this is no longer expected and you shouldn't give up your right to know what you're buying
- Negotiate on price — especially for homes that have been listed for 30+ days
7. Run the Numbers on Renting vs. Buying
In many Colorado markets, buying is now cheaper than renting on a monthly basis — especially factoring in the tax benefits of mortgage interest deductions and the equity you build with every payment.
Realtor.com's forecast projects rent growth declining 1.0% nationally in 2026, while home prices appreciate 2-4%. Over a 5-year horizon, the wealth-building advantage of ownership is significant.
The Bottom Line
The 2026 market rewards preparation. Buyers who are pre-approved, financially organized, and ready to move quickly will find more opportunity than we've seen in years. Those who wait for "perfect" conditions will watch from the sidelines as others build equity.
Start your pre-approval with Cedar Home Loans today and let's build a strategy that works for your situation.