Young Buyers Would Risk Retirement Savings to Buy a Home

For many Americans, purchasing a first home ranks right next to graduating from college and landing that initial full-time job as a major milestone of early adulthood. But home prices across the country today are too far out of reach to make owning a home a reality for many young adults. 

Housing prices have skyrocketed in the 2020s. According to government data, the average sales price of a new house in the U.S. was more than $514,600 for the first quarter of this year. In the same quarter in 2020, that figure came in at $383,000, which is more than $130,000 less than where it stood earlier this year.

Nevertheless, the prospect of owning a home is appealing to many consumers. A new survey from TD Bank reveals that aspiring homebuyers are willing to venture off the beaten path to secure their first home.

The CARAVAN survey conducted by Big Village included 1,003 U.S. adults who have never owned a house and plan to buy in 2026. Of those who responded to the survey, a whopping 74% said that if a 50-year mortgage were available, they’d consider using it. 

A 50-year mortgage would tie borrowers to a lender for 20 years longer than a 30-year mortgage. Nearly 90% of people who buy a house opt for a 30-year mortgage with a fixed rate, according to mortgage backer Freddie Mac.

The report from TD Bank also revealed that homeowners would dip into their retirement accounts to help fund a home purchase if they could. Nearly three-fourths of Gen Z respondents and 78% of younger millennials said that, if permitted, they would likely use funds from their 401(k) to help buy their first home.

According to Northwestern Mutual, consumers who haven’t reached retirement age can take a loan from their 401(k) to put toward a new home if their plan allows it. To avoid potential penalties, consumers have to repay borrowed amounts within five years in most cases. And they also must pay back interest on the funds they take out. 

But these are the types of financial moves people are considering to reach their goal of buying a home in 2026.

“First-time homebuyers’ desire and motivation to buy remains strong, and they are approaching their budgeting and financial boundaries with flexibility,” Steve Kaminski, Head of Residential Lending at TD Bank U.S., said in a post on the company’s website.

Rising Prices Put a Strain on Family Budgets

The increase in average home sale prices is one reason why many people feel that home ownership isn’t within their reach. Another factor is the rising price of gas.

The cost of gasoline has shot up across the country this year. AAA reported that the national average price of a gallon of regular unleaded gasoline on May 14 was $4.53. That figure came in at just $3.18 in May of 2025.

Many people in the market for their first home turn to lenders for down payment assistance on the house of their dreams. But that may not be a realistic option for those with bad credit or thin files.

The TD Bank report indicates that first-time homebuyers are increasingly paying attention to their credit reports. More respondents say they are taking steps — such as staying current on payments and chipping away at debt — to improve their credit this year compared with 2025. 

The price of a gallon of regular unleaded gasoline in the U.S. has reached $4.53, according to AAA.

Without affordable access to traditional sources of credit, young people may have to turn to other avenues to boost their financial position. A new Bank of America study shows that 51% of 18-22 year olds who took part in a recent survey about money habits turn to their parents or other family members for financial assistance.

Young adults may be able to count on family for some money from time to time to help them through a rough patch. But that’s quite different than expecting an aunt or uncle to fork over enough cash to make a 20% down payment on a house or take care of mortgage payments each month.

Lenders can help consumers achieve their homeownership goals by helping them prepare for all the costs that can pop up when buying a house.

“Meeting with a lender early in the process helps [first-time homebuyers] better understand how they should structure their timeline, prepare their full financial picture, make a budget, and assess other common costs in their region,” Scott Lindner, National Sales Director at TD, said in the company’s report.