Is This a Market Crash—or Just a Brutal Reality Check?
The headlines are dramatic, and for once, they’re not wrong. First-time homebuyers are getting squeezed harder than ever. Affordability has all but vanished. Entry-level homes? Nearly extinct. And even when the perfect place pops up, good luck winning the bidding war against investors with deep pockets and waived contingencies.
Starter Homes Are the Unicorns of 2025
Finding an affordable first home today feels like chasing a myth. Low inventory, high demand, and rising costs have made entry-level listings nearly impossible to land—unless you’re lightning fast or loaded with cash.
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First-Time Buyer Experts: Jim & Shannon
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If you’re a first-time homebuyer in the Fargo-Moorhead area, Jim and Shannon at Modern Market REALTORS® will help you stay competitive—breaking down budget planning, offer strategies, and affordable options so you don’t overpay or miss your window.
First-time home sales are tanking?
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🔽 Table of Contents
The dream of homeownership is slipping out of reach for many first-time buyers. Rising rates, shrinking inventory, and fierce competition are driving a silent crisis in North Dakota and Minnesota.
First-time buyers are waving the white flag in what feels like the most brutal real estate standoff in modern history. National headlines are screaming “affordability crisis” — but for buyers just trying to get in the door, the crisis is personal.
The numbers don’t lie — and they’re ugly. In 2024, just 26% of home sales went to first-time buyers — the lowest since Ronald Reagan’s first term. That’s not a dip. That’s a freefall. 🧨
📉 Why It Looks Like a Crash
Let’s start with the facts:
- ✅ First-time buyer market share: 26% (2024)
- ✅ Down from 32% in 2023 and nearly 50% in 2010
- ✅ Existing home sales have dropped over 4.7% YOY
Combine that with a 14% plunge in new home sales this spring, and you get a market that’s freezing out the very people it needs most — entry-level buyers. And it’s not because they’re not interested. It’s because they’re being priced, squeezed, and outbid.
🚫 What’s Driving Buyers Out
The culprits are as predictable as they are punishing:
- ✅ Mortgage rates: Now hovering around 7%
- ✅ Median home price: Over $420,000 nationally
- ✅ Starter home inventory: Critically low
Buyers aren’t just facing bidding wars anymore. They’re facing an economy that’s locked up with “golden handcuffs”—existing owners sitting tight on 3% mortgage rates, leaving nothing on the market.
🏘️ ND & MN: Local Market Pressure
In the Fargo-Moorhead area, first-timers are feeling the crunch, too. Sure, it’s not Miami or Austin, but affordability here is evaporating faster than expected.
- ✅ Fargo, ND: Inventory remains tight in the under-$300K range
- ✅ Moorhead, MN: Competition from investors is rising
- ✅ Mapleton, Dilworth, Kindred: Builders can’t keep up with demand
And when starter homes *do* hit the market? They’re snatched up in days — sometimes hours — often by cash-heavy buyers skipping inspections. First-time hopefuls never even get a look in.
🌤️ The Hidden Silver Lining
Here’s what the headlines aren’t telling you: First-time buyers are down, but not out.
According to New York Fed data, 58% of agency-backed mortgages in Q1 2025 went to first-timers — a record. They’re finding ways to stay in the game, using FHA loans, gift funds, and creative financing.
✅ They’re persistent.
✅ They’re informed.
✅ And they’re showing up, even when the odds look grim.
💡 How First-Timers Can Compete
The smart ones are doing things differently:
- ✅ Getting pre-approved before shopping
- ✅ Targeting smaller cities and outlying towns
- ✅ Exploring fixer-uppers and townhomes
- ✅ Working with local agents who know the nuances
In places like West Fargo, Horace, and Glyndon — where prices are *just* more digestible — there’s still hope for first-time buyers with hustle and guidance.
✅ Agent Tips for This Market
If you’re working with buyers — or *are* one — here’s how to beat the odds in 2025:
- ✅ Partner with agents offering real local expertise (not just portal searches)
- ✅ Use down payment assistance programs from NDHFA or Minnesota Housing
- ✅ Focus on listings with longer days-on-market or stale builder inventory
- ✅ Don’t be afraid to write backup offers — they often come through
And sellers? Don’t underestimate first-time buyers. They’re motivated, committed, and ready — they just need a fair shot.
❓ FAQ: First-Time Buyer Struggles
First-time home sales are tanking?
Yes — first-time homebuyer market share dropped to 26% in 2024, the lowest level in over 40 years. High prices, rates, and low inventory are the key drivers.
Why are first-time buyers struggling in 2025?
Mortgage rates above 6.8%, sky-high home prices, and tight inventory have made it nearly impossible for many first-timers to compete.
What’s happening in Fargo-Moorhead for first-time buyers?
Inventory under $300K is sparse, and competition is intense. Buyers in Cass and Clay County must act fast, be well-prepared, and target emerging markets.
Are any programs helping first-time buyers?
Yes — FHA, USDA, and VA loans are common. North Dakota and Minnesota also offer state-level grants and assistance through NDHFA and Minnesota Housing.
Is it still a good time to buy?
If you find a home that fits your budget and needs, yes. Waiting could lead to higher prices or rates. Focus on long-term value and affordability, not market timing.
Can first-timers compete with investors?
Yes — with strong offers, flexible terms, and agent support. Many sellers still prefer selling to families or individuals over corporate landlords.
What’s the average down payment for a first-time buyer?
Nationally it ranges between 6% and 8%, though some buyers secure homes with as little as 3.5% through FHA loans or 0% via VA loans.
What areas near Fargo offer better value?
Dilworth, Kindred, Horace, and Mapleton offer lower price points and less competition. These areas are growing quickly with more options for first-timers.
🟢 Live Where You Love with expert buyer support from Modern Market REALTORS®. We help you navigate a tough market with real answers, local insight, and no junk fees. Let’s talk today.
