Core Insights - The 2026 housing market is expected to be more favorable for buyers, with mortgage rates cooling and increased inventory, allowing for better financial preparation [2][15] - Inflation has decreased to approximately 3% year over year, which may lead to potential rate cuts by the Federal Reserve, providing relief on borrowing costs [2][15] - Buyers are encouraged to start preparing now to secure favorable mortgage rates and improve their financial readiness [3][12] Financial Preparation - Prospective homebuyers should assess their finances and get organized before considering home purchases [4] - Participating in home-buyer education courses can enhance understanding of the buying process and boost confidence [5][6] - It is crucial to evaluate budgets realistically, factoring in major upcoming expenses to understand comfortable monthly payments [7][8] Understanding Costs - Buyers often overlook hidden costs such as property taxes, insurance, and maintenance, which can significantly impact affordability [8][9] - Preparing financially for at least six months before applying for a mortgage is recommended, including checking credit reports and managing debt [8][9] Down Payment Myths - The belief that a 20% down payment is necessary is largely a myth; various loan options allow for lower down payments [10][11] - FHA loans can require as little as 3.5% down, and VA loans may allow for $0 down at closing [11] Timing and Market Conditions - Experts advise against trying to time the market, as personal and financial readiness should be the primary focus when considering a home purchase [12][13] - The market in 2026 is expected to be more balanced, but affordability will likely improve more from easing interest rates than from falling home prices [16][15] Savings Recommendations - It is advisable to save 2% to 5% of the purchase price for closing costs, in addition to the down payment [17] - Having three to six months of expenses saved before closing can help manage unexpected homeowner costs [18]