America’s First-Time Home Buyers Feel Ready. The Facts Say Otherwise

(StatePoint) A new homebuying quiz reveals a stark disconnect: most aspiring first-time buyers believe they’re ready to buy a home, but fundamental knowledge gaps suggest otherwise.

Consider a typical would-be buyer. She’s saved for years, tracks listings daily, knows her preferred neighborhoods, and has consumed endless checklists and videos about buying a home. She feels prepared.

Then she takes a 12-question homebuying quiz and gets only three answers right.

Her experience is far from unique. A recent Wells Fargo survey conducted by Ipsos found that nearly 70% of prospective first-time homebuyers believe they understand the process. Yet roughly three-quarters couldn’t correctly answer even half the questions. Out of more than 2,000 respondents, only one answered all 12 correctly.

The results point to a troubling confidence gap where mistakes can be especially costly. Buying a home is a long-term financial commitment that shapes a household’s future for decades. Overestimating knowledge increases the risk of delays, higher costs, and unnecessary financial strain.

The quiz was conducted March 5–13, 2026, testing foundational concepts affecting affordability and competitiveness, such as when to apply for a mortgage, how closing costs work, down payment strategies, and structuring offers. The findings suggest many first-time buyers lack understanding of the most consequential steps.

Only 25% knew the correct timing to apply for a mortgage, an error that can derail transactions before the home search begins. Nearly 90% misunderstood closing costs, leaving buyers vulnerable to large, last-minute expenses that could reach tens of thousands of dollars. More than 75% believed a larger down payment is always better, overlooking strategies that could preserve savings or improve financial flexibility.

Even more striking, 88% were unclear about the very first steps in the process. Four in five would make serious offer mistakes, including revealing their maximum pre-approval amount to sellers—instantly weakening their negotiating position. For many respondents, realizing they had the process backward—house first, financing later—served as a wake-up call.

“These results should be a wake-up call for everyone in the industry,” said Rulon Washington, Customer Growth Segments executive at Wells Fargo Home Lending. “We’re seeing confident, motivated buyers entering one of the most significant financial decisions of their lives with critical blind spots.”

Where buyers get information may explain the disconnect. Most relied on friends, family, real estate websites, and search engines. Only about one-third consulted lenders or financial professionals, the experts best positioned to provide personalized guidance.

Younger buyers were especially likely to turn to social media influencers, viral videos and AI tools, while older buyers leaned on banks and advisors. The risk isn’t curiosity, it’s oversimplification. Short-form content often strips away crucial nuance, glossing over differences in credit profiles, debt levels, local markets, and long-term trade-offs.

These gaps have real consequences, and the cost isn’t just measured in dollars, it's measured in financial stress, missed opportunities and dreams deferred.

Misunderstanding closing costs can cause deals to collapse. Poor timing on mortgage applications can push buyers out of competitive markets. Misjudging down-payment strategies can drain emergency savings or lock borrowers into avoidable costs for the life of a loan. Small mistakes can compound into years of preventable financial stress.

There is, however, a bright spot. Nearly two-thirds of quiz-takers said the experience made them feel more informed or more aware of what they need to learn. Many said it prompted them to slow down, seek professional guidance, or reset expectations—short-term pauses preventing long-term regret.

The Wells Fargo Home Lending Quiz is available online. Visit the Wells Fargo Mortgage Learning and Education Center to learn more.

As the 2026 homebuying season accelerates, the takeaway is clear: confidence alone isn't enough. Knowledge—and knowing your blind spots—may be the most valuable down payment of all.

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Photo Credit: (c) Jacob Wackerhausen / iStock via Getty Images Plus