As home prices remain high and mortgage rates fluctuate, prospective buyers face significant challenges navigating the complex homebuying process. A recent survey by SoFi of 500 U.S. adults seeking to purchase homes reveals that affordability and understanding mortgage options top buyers’ concerns, yet most remain optimistic about buying within their budgets.

Affordability and Financing Are Major Concerns

With the median home price at $419,200 at the end of 2024, finding an affordable property continues to be the greatest hurdle for 42% of buyers. Additionally, 14% reported insufficient savings for a down payment, while 11% cited poor credit scores, and another 11% struggled to secure mortgage approval. Job and income uncertainty also affected 10% of respondents. Many buyers remain unaware of assistance programs; nearly half of those challenged by down payments had not explored options that could ease their financial burden. The typical down payment has decreased nationally, with first-time buyers averaging just 8%, according to the National Association of Realtors.

Navigating Confusing Homebuying Steps

Beyond financial concerns, buyers found several stages of the process confusing. Forty-one percent identified locating the right property as most difficult, while 38% struggled with mortgage options. Additional challenges included interpreting home inspection reports (32%), handling paperwork and negotiations (31% each), and selecting a real estate agent (26%).

Technology Assists Homebuyers

Technology plays a vital role in modern home shopping. About two-thirds (65%) use online listing platforms like Zillow or Redfin, while 41% have accessed online lenders. Virtual and augmented reality tools are gaining popularity, with 39% using these for property viewing. Notably, 40% of buyers expressed willingness to purchase homes sight unseen, relying on thorough research, legal advice, and professional inspections to mitigate risks.

Budgeting Amid Rising Prices

Despite high prices, 81% of buyers feel confident they can purchase a home within six months. Budgets varied widely: 29% aimed between $250,000 and $499,999; 15% targeted below $100,000; and 25% planned for $500,000 to $999,999. Interestingly, many buyers budgeting above $500,000 reported annual incomes under $100,000, often depending on proceeds from previous home sales or cash purchases.

Planning Budgets

Buyers used diverse strategies to establish budgets, including assessing personal finances (48%), using online calculators (37%), consulting financial advisors (36%), reviewing credit reports (36%), and calculating debt-to-income ratios (33%). Twenty-seven percent pursued lender preapproval to clarify their purchasing power.

Down Payment Plans and Assistance

Down payment intentions ranged from 7% seeking zero-down options to 23% planning 21% or more. Government-backed loans like VA, FHA, and USDA provide flexible down payment alternatives, especially for first-time buyers. However, 10% remained uncertain about their down payment amount.

Saving Strategies for Homebuyers

Nearly all respondents (92%) modified spending habits to save for a home, including cutting discretionary expenses (49%), increasing savings contributions (45%), taking on side jobs (41%), downsizing living situations (26%), and receiving family financial help (around 25%). Prospective homeowners also voiced concern about ongoing costs such as maintenance (47%), property taxes (46%), mortgage payments (45%), insurance (39%), utilities (30%), and homeowners association fees (25%).

Choosing Lenders and Loan Applications

Interest rates were the most critical factor for 64% when selecting a mortgage lender, followed by closing costs (50%), special programs (40%), and reputation (39%). About one-quarter of buyers were paying all cash a record high. Over half had applied for loans, favoring FHA (28%) and conventional loans (26%), with USDA (23%) and VA loans (12%) also common. Awareness of government loan programs was relatively strong.