There’s nothing like the joy of owning your first home. Locating the perfect neighborhood, finding a house with charm, and decorating to your style are all thrilling parts of purchasing your first home. These gleaming positives can easily mask the downsides and hardships of the process. Affordability, financial planning, and poor market conditions can significantly impact a first-time buyer’s experience in homeownership.
Packing up your life and settling into a new home takes time, careful planning, and a great deal of determination. For individuals seeking to secure their first home, particularly in Tennessee, several aspects of house hunting may come as a surprise.
Common Challenges for First-time Homebuyers
While the right home can look different for everyone, whether it’s an individual, a couple, or a family, there are some similarities in the first-time home buying experience today. The following challenges are some of the most common.
Rising Prices & Inventory Shortages
The housing market has experienced a significant decline in new home construction since 2008, while demand has increased nationwide. Mortgage guarantor Freddie Mac’s latest estimate suggests that the U.S. is short approximately 3.7 million housing units.
As such, homebuyers are not only faced with fewer options but also rising prices on what is available due to the demand. Tennessee, in particular, experienced a 3.0% year-over-year increase in home prices in April 2025, accompanied by a 10% decrease in the number of homes sold.
Closing Costs
Most people are familiar with an upfront down payment when buying a home, but first-time homebuyers are often caught unaware of what closing costs truly encompass. Things like appraisal and inspection fees, lender fees, credit report fees, title and legal fees, government fees, escrow reserves, property taxes, prepaid interest, and even HOA fees can add up and significantly impact your bank account if you’re not prepared.

Lack of Education
Not knowing what to expect can derail a house-hunting experience. New homebuyers often aren’t sure what can be negotiated, what upfront costs are required, and even how long the process can take. Jargon, unfamiliar acronyms, and overwhelming terms can make understanding the home-buying process daunting.
Navigating Credit Issues & Mortgage Pre-approvals
Mortgage pre-approvals, the process by which a lender reviews your finances and indicates the amount of money they are willing to loan, are something that first-time homebuyers may overlook. But it’s essential to do this before beginning your home search, as limited credit history, high debt-to-income ratios, and late payments can all impact your borrowing potential.
How to Overcome These Challenges
Don’t let these potential challenges scare you off! There are ways to make the home-buying process easier while also fitting your needs.

Set a Budget & Prepare Financially
Being clear on your budget upfront will help set clear expectations for you and your team. Knowing your budget also helps mitigate feelings of uncertainty or fear of overspending. Understanding your finances thoroughly will give you confidence in your decisions and set you up for success.
Know Your Rights
It’s also important to know your rights before purchasing a home. The U.S. Department of Housing and Urban Development offers resources on its website that explore the various rights and opportunities homebuyers should be aware of before beginning the process.
Do the Research
Taking the extra time to understand home-buying terminology and what to expect can make your home-buying experience more straightforward. There are numerous resources online, and Tennesseans can also find housing statistics to understand how the local markets stand.
Be Flexible
First-time homebuyers should set realistic expectations. It’s rare to find everything on your list in the exact right location at the right price point in your first home. There’s no harm in identifying all the things you want and need in a home, but at the same time, note what’s truly a must-have versus nice to have. Being flexible with location, home type, and features, especially in hot housing markets like Nashville, Tennessee, can open up opportunities for options that may pleasantly surprise you.
Build the Right Team
Finding a support system you trust to guide you through your home-buying process gives you peace of mind and reassurance to make the tough decisions. For Tennesseans, resources like Tennessee REALTORS®, the state organization of the National Association of REALTORSⓇ, are a trusted ally and advocate for you. Their licensed brokers and agents can offer local expertise, extensive search power, and negotiation knowledge that can make a real difference for first-time homebuyers.
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Buying a first home is a major milestone, whether it’s in Tennessee or elsewhere. The journey to get there, although sometimes tumultuous, is always worth the hard work. Prepare for your next chapter with proper planning and an open mind for what’s in store.
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