Down Payment Requirements Shut First-Time Buyers Out of Bergen County's Housing Market

Written by:

Rudi Davis

Date:

03 Mar 2026

Share

Share via Facebook

Share via Linkedin

Share via X

Copy to clipboard

The idea that high interest rates are keeping first-time buyers out of Bergen County’s housing market misses the real obstacle, according to Gina Gerszberg, broker salesperson at Douglas Elliman Real Estate. While rates get most of the attention, Gerszberg says the real hurdle for new buyers is the size of the down payment needed to compete, particularly in bidding wars. Buyers with less than 20% down are effectively shut out of the best homes, and cash buyers are winning deals at every price level.

“The biggest challenge right now for new home buyers is having enough money for a down payment,” Gerszberg says. “If you have less than 20% down, it is very difficult to win in a multiple offer situation. It’s almost impossible.”

Why Interest Rates Are Not the Primary Barrier for First-Time Buyers

Gerszberg notes that today’s interest rates are not the main reason first-time buyers struggle to get in. She describes current rates as “a very reasonable historic norm” and argues that the focus on rates distracts from the larger problem: buyers need more cash upfront to compete.

Buyers with sufficient savings are moving forward at current rates. Buyers waiting for rates to drop may not realize that a strong down payment will remain essential regardless of where rates land. The real barrier is not the monthly mortgage payment, but getting enough cash together to make a competitive offer.

This is especially true for homes that attract multiple offers — still the norm for well-priced properties in desirable Bergen County neighborhoods. Sellers and listing agents prefer larger down payments or all-cash offers because those transactions carry a lower risk of financing contingencies or appraisal shortfalls. Buyers who rely on low-down-payment loans are often outbid, even if they offer the same or more money for the home.

Cash Offers Outcompete Financed Buyers Across All Price Tiers

Gerszberg says cash buyers are now common at every price tier, including homes above $3 million. Buyers using financing cannot match the certainty and speed of cash offers, regardless of their interest rate.

“I just closed out a house that was over $3 million that was a cash offer,” Gerszberg says.

The dominance of cash buyers has split the market between those with significant liquid assets and those who need a mortgage.

This divide is especially hard on first-time buyers. Without equity from a previous sale, they must rely on personal savings or family help for the down payment. In a market where homes sell quickly and bidding wars are common, these buyers are at a clear disadvantage.

 Why Waiting for a Market Crash May Cost Buyers More

Gerszberg also sees a psychological barrier: some buyers are waiting on the sidelines, convinced that a market crash is just around the corner and that prices will fall. She considers this belief unfounded.

“I think a lot of people believe, and this is not true, that there’s going to be some type of a crash,” Gerszberg says. “Buyers think they’re paying too much and that prices will drop, but I don’t think that’s going to happen.”

This wait-and-see approach only adds to the problem. Buyers who delay are not saving fast enough to outrun rising prices or tougher competition. Gerszberg observes that buyers who delay often return to the market months later, facing the same hurdles, but with fewer listings available.

 How Buyers With Smaller Down Payments Can Still Enter the Market

For buyers who can’t put down 20%, Gerszberg suggests focusing on properties that are not attracting multiple offers, usually homes that need renovation or are in less popular parts of their preferred towns. These homes allow buyers to enter the market without going head-to-head with cash buyers or those with large down payments.

She describes these as “wallflower” properties: homes that may need work but are situated in desirable towns or school districts. Gerszberg says buyers sometimes need to accept that their first home may not be perfect, but getting into the market is more important than waiting for the ideal property.

“Anything can be fixed, anything can be renovated,” she says, but location is permanent. For buyers prioritizing schools or commutes, compromising on conditions may be the only way to buy.

Gerszberg also urges buyers to treat homeownership as a step toward building wealth, not just a lifestyle upgrade. “It’s one of the most reliable ways to build wealth and equity,” she says. She recommends working with a professional to find creative ways to enter the market, even if it means starting small or accepting a less updated home.

Bergen County Market Outlook: Conditions Favor Cash and High-Equity Buyers

Looking ahead, Gerszberg does not expect conditions to improve significantly for buyers struggling with down payments. She predicts that inventory will remain tight and that multiple-offer situations will continue for well-priced homes in desirable locations. The main change she anticipates is more realistic pricing from sellers, which could reduce the frequency of bidding wars but will not shift the advantage away from cash and high-equity buyers.

For first-time buyers, this means the path to homeownership in Bergen County will continue to require substantial savings, careful property selection, and a willingness to compromise on condition or location. The biggest hurdle is not the interest rate, but the upfront capital needed to compete in today’s market. Buyers who build savings and remain flexible in their search are best positioned to succeed, rather than waiting for market conditions that may not arrive.