How to buy a house in 2026

Home prices and mortgage rates both remain high in 2026, though some areas have seen prices decline and buyers gain more leverage. Whatever the state of the housing market in your area, buying a home can be a complicated process with plenty of ins and outs. Before you start your search, here’s what to know about buying a house in 2026 — one step at a time.

Buying a house: A step-by-step guide

1. Determine why you want to buy

Purchasing a home is a major decision. If you’re not clear from the start on exactly what you want out of homeownership, you could end up regretting your purchase.

Get started: Define your personal and financial goals. “Buyers should think about what they want in a home — amenities, ideal location, how long it could take them to save for a down payment,” says Edwence Georges, a real estate agent with eXp Realty in New Jersey. “These are all important to help define the goals they would like to meet.”

2. Save for a down payment

People often think they need to put a minimum of 20% down to get a mortgage. That’s simply not true. Many types of loans require a much lower minimum down payment, and there are many government programs that help cover down payment costs for qualified buyers.

Shop around carefully based on how much you’re able to pay upfront. While you will have to pay private mortgage insurance (PMI) with less than 20% down, the trade-off is that you’ll get started building equity sooner.

Get started: Research the requirements for the loan you want so you know exactly how much you’ll need to save. If a friend, relative or employer has offered to provide a down payment gift, initiate a conversation early on to learn how much they plan to contribute and if there’s any shortfall you’ll need to cover. Your lender will require them to write a gift letter.

3. Check your credit score

Your credit score will help determine your financing options; lenders use it (among other factors) to set the terms and rates of your loan. The higher your score, the better your rate will be — lower credit scores equate to more expensive mortgages.

Get started: You can get your credit report and score for free once a year from each of the three major credit reporting agencies: Equifax, Experian and TransUnion. If you discover any discrepancies, contact each agency and report the error.

4. Create a housing budget

If you’re only looking at the purchase price and down payment amount, you aren’t seeing a complete picture of the costs of buying a house. Setting a realistic budget for your new home will help inform how much you can afford and what your all-in costs will be.

Get started: Carefully consider closing costs and other expenses to determine what you can afford long-term. “Buyers tend to forget to factor in other costs, like homeowners association fees and maintenance,” says Paige Kruger, Realtor and founder of Signal Real Estate in Jacksonville Beach, Florida. “Just because you can afford a mortgage and a down payment doesn’t mean you can afford those long-term costs after you move.”

5. Shop for a mortgage

Getting preapproved for a mortgage gives you a firmer handle on how much you can afford, because it shows you the amount a lender would (hypothetically) be willing to approve you for. It also shows sellers you’re financially qualified. Once you’re ready to apply for official approval, you’re not obligated to stick with the same lender that issued your preapproval — compare the terms and rates offered by several companies.

Get started: Shop around with at least three lenders or a mortgage broker to increase your chances of getting a low interest rate.

6. Hire a real estate agent and go house hunting

Once you’ve got your financials sorted, you’re ready to hire a local agent and hit the pavement — and the open houses.

Get started: Contact several local agents and talk with them about your needs before choosing one. Be specific about exactly what you want, so they can more effectively find options that meet your criteria. Make a list of priorities and find the house that meets most of them while still in your budget. “Someone with knowledge of an area can tell if your budget is realistic or not, depending on the features you desire in a home,” Kruger says.

7. Make an offer

Understanding how to make an attractive offer on a home can increase the chance of it being accepted. Confer with your real estate agent and let their expertise lead the way.

Get started: Once you find “the one,” your agent will help you prepare a complete offer package, including your offer price, your preapproval letter, proof of funds for a down payment (this helps in competitive markets) and terms or contingencies.

8. Get a home inspection and negotiate repairs

A home inspection provides an overall picture of the property’s condition and any mechanical or structural issues it might have. Major problems might need to be dealt with before your mortgage lender will finalize your loan, and it’s common to negotiate for the seller to either pay for the repair or offer the buyer a credit to cover the cost. If there’s an inspection contingency in the contract, you might even decide to back out of the deal.

Get started: Enlist your agent’s help with this — the need for repairs is not unusual, but negotiation can be delicate work and is best left to the pros. An experienced agent will know what repair costs you should ask the seller to cover and what is not worth asking for. They will work with the seller’s agent to come to an agreement.

9. Secure your financing

Getting final loan approval means you need to keep your finances and credit in line during the underwriting process. Don’t open new credit lines or make any major purchases until the paperwork is signed, and avoid changing jobs before closing too, if possible.

Get started: Respond promptly to requests or questions from the lender, to avoid delays, and double-check your loan estimate to ensure all the details are correct. You may need to submit additional documents as your lender completes the process, so keep all your paperwork organized.

10. Do a final walk-through

A final walk-through is your opportunity to view the property one last time before the deal is done. This is your last chance to address any outstanding issues before the house becomes your property — and your responsibility.

Get started: Your agent will schedule the walk-through for shortly before closing. Bring your home inspection report and other documents, like repair invoices and receipts, to ensure everything was done as agreed and that the home is move-in ready.

11. Close on your house

Once all contingencies have been met, you’re happy with the final walk-through and your lender has declared your loan “clear to close,” it’s finally time to make it official. After all the paperwork has been signed at the closing table, the home is officially yours and you’ll get the keys. Congratulations!

Get started: Three business days before your closing date, the lender will provide you with a closing disclosure that outlines your loan details, including exactly how much money you must bring to closing. The closing is when the money will actually change hands. Your agent will attend, and possibly the seller and their agent, as well as the closing agent, who may be a representative from the escrow or title company or a real estate attorney.

Affordability issues to consider

• How much house can you comfortably afford? Knowing how much you can afford is crucial to housing stability and actually enjoying your home. A good rule of thumb is the 28/36 rule, which states that your monthly housing payment should be no more than 28% of your gross income, and your total monthly debt payments shouldn’t exceed 36%. If the house you want would exceed those parameters, you might be stretching yourself too thin.
• What’s your local market like? The area you’re house-hunting in has a major impact on what to brace for as a homebuyer. Each market has its own quirks to consider: For example, the taxes, cost of living, job market and housing situation in California will yield different buying conditions than in Texas or Ohio. And even within the same city, real estate is very localized — you might be surprised by how drastically market conditions can vary from one neighborhood to the next. This is why partnering with a knowledgeable local agent who understands the intricacies of their market is important.
• How prepared are you for extra costs? A home purchase involves plenty of costs beyond just the down payment, starting with closing costs. These fees will vary by state and by individual transaction, but they will almost certainly range into the thousands of dollars. When budgeting for your monthly housing costs, factor in not only the principal and interest amounts of your mortgage payment, but also property taxes, home insurance premiums and homeowners association fees (if applicable), plus private mortgage insurance if you’re putting down less than 20%. And don’t forget to set aside money for ongoing maintenance and unexpected repairs, too.

FAQs

• What is a good credit score to buy a house?

  There is no set answer, but the minimum score needed to qualify for most conventional loans is 620. There are options that have much lower requirements, but generally, the higher your credit score, the better rate you’re likely to qualify for. According to Experian, the average FICO score in 2025 was 713, down from 715 in 2024.

• I make $75K a year – can I afford to buy a house?

  It all depends on your local housing market’s prices and how much other debt you have. Based on the 28/36 rule, your maximum monthly payment with a $75,000 yearly salary would be $1,750. That puts your budget at around $270,000, assuming a 5% down payment. However, this can vary greatly depending on property taxes and insurance costs.

• How much of a down payment do I need for a $300,000 house?

  It’s a common misconception that you have to put 20% down. In fact, with a conventional loan you can put as little as 3% down — that would be $9,000 for a $300,000 home. FHA loans, another popular choice, require a minimum of 3.5% down for qualified borrowers — that’s $10,500 on a $300,000 house. If you want to avoid paying for private mortgage insurance (PMI), you’d need to put down 20%, or $60,000.

With additional reporting by Meaghan Hunt