First-Time Homebuyer's Guide: 5 Steps to Getting Pre-Approved in 2025

The 2025 Housing Market at a Glance

The national housing market in 2025 presents a cautiously optimistic outlook for aspiring homeowners. According to leading real estate associations, a modest 3% growth in national median home prices is anticipated this year, with the median home price for May 2025 standing at approximately $422,800. This comes alongside an expected rebound in home sales, with existing-home sales projected to increase by 6% and new-home sales by 10% compared to 2024. A key factor in this positive shift is the easing of mortgage rates, which are forecasted to stabilize around 6.4% by the end of 2025. Furthermore, the addition of 1.6 million new jobs to the economy is expected to bolster financial stability for many potential buyers.



However, first-time homebuyers continue to face challenges, including elevated home prices, higher mortgage interest rates, and limited inventory. In 2024, first-time buyers comprised 24% of all home buyers, a decrease from 32% in 2023, with the median age for this group rising to 38. This highlights the need for thorough preparation.

Local Snapshot: Blair County, PA Real Estate

For those looking to buy in Blair County, Pennsylvania, the local market shows its own unique dynamics, based on recent real estate data. In May 2025, the median sale price of a home in Blair County was approximately $173,000, reflecting an increase of 11.9% since last year. The median sale price per square foot was about $119, also up 12.3% year-over-year.



Homes in Blair County are selling relatively quickly, averaging just 20 days on the market in May 2025. While the county as a whole might present a competitive environment given the faster sales, the market dynamics can vary by specific area. For example, some data sources indicate Blair County as a buyer's market in May 2025, suggesting that the supply of homes is greater than the demand in some areas, potentially offering more negotiation room. The median listing home price was around $175,000, with the median sold price slightly higher at approximately $189,900. The median home value for Blair County is approximately $174,307, showing a 4.4% increase over the past year. These local trends underscore the importance of understanding the specific conditions in your desired area.

Your 5 Steps to Getting Pre-Approved

Getting pre-approved for a mortgage is a critical first step, as it tells you how much you can realistically afford and shows sellers you're a serious buyer.

Step 1: Check Your Credit Score

Your credit score is a major factor in determining your eligibility for a mortgage and the interest rate you'll receive. Lenders use it to assess your creditworthiness. Before applying for pre-approval, obtain your credit report from all three major credit bureaus (Equifax, Experian, and TransUnion). Review it for any errors and work to correct them. Pay down outstanding debts to improve your credit utilization ratio, which can boost your score.

Step 2: Determine Your Budget and Savings

Beyond your credit score, lenders will look at your income, existing debts, and savings. Calculate your debt-to-income (DTI) ratio, which is the percentage of your gross monthly income that goes toward debt payments. A lower DTI ratio generally makes you a more attractive borrower. Also, assess your savings for a down payment and closing costs. While a 20% down payment is ideal to avoid private mortgage insurance (PMI), many first-time buyer programs offer options with lower down payments.

Step 3: Gather Necessary Documents

When you apply for pre-approval, your lender will require a range of financial documents to verify your income, assets, and liabilities. Be prepared to provide:

• Pay stubs (last 30-60 days)
• W-2 forms (last two years)
• Tax returns (last two years)
• Bank statements (last two-three months)
• Statements for other assets (e.g., investment accounts)
• Information on existing debts (car loans, student loans, credit cards)
• Proof of identity (driver's license, Social Security card)



Having these documents organized will streamline the application process.

Step 4: Choose a Lender and Apply

Research different lenders, including traditional banks, credit unions, and mortgage brokers, to find one that best fits your needs. Compare interest rates, loan terms, and fees. Once you've selected a lender, submit your application for pre-approval. This process involves a "hard inquiry" on your credit, which may temporarily ding your score, but the impact is minimal if done within a short shopping period (typically 14-45 days).

Step 5: Understand Your Pre-Approval Letter

If approved, you'll receive a pre-approval letter stating the maximum loan amount you qualify for. This letter is crucial when making an offer on a home. However, remember that pre-approval is not a guarantee of a loan; it's a conditional commitment. The final loan approval is subject to a property appraisal, a detailed review of your financial situation, and verification of all the information you provided.

Next Steps in Your Homebuying Journey

Getting pre-approved is a significant step, but it's just the beginning. Once you have your pre-approval letter, you can confidently start your home search. Working with me, I can help you navigate the market, find suitable properties, and guide you through the offer and closing process.