Buy Your First Home Sooner With a Starter Home and an ARM

By Ted Holmes

Edward “Ted” Holmes is a Licensed Associate Real Estate Broker and founder of The Holmes Team at William Raveis Real Estate, serving Chappaqua and Northern Westchester County, NY. With 25 years licensed, 456 career transactions, and consistent top-ranking production statewide, he is a recognized expert in residential, luxury, and commercial real estate.

Most first-time homebuyers assume that ownership is something that happens later, once the savings are bigger and the timing is better.

The numbers seem to agree. By one widely cited estimate from Zillow, a typical household takes around 8.5 years just to save a 20% down payment, and then close to six more years before owning actually costs less than renting, which stretches the whole thing toward 15 years.

After 25 years helping buyers across Chappaqua and Northern Westchester, plus eight years as a mortgage broker before that, I can tell you that number isn’t wrong, but it isn’t the only path either. It’s built on two assumptions, and once you see them, you can change them.

The 15-year figure assumes a mid-priced home and 20% down. Both of those are choices, not requirements, and that’s the opening. The estimate imagines you’re buying a home right in the middle of the market and putting a full fifth of the price down in cash. Loosen either assumption and the timeline moves. That’s what the two levers below come down to: the home you target and the way you finance it.

Targeting a starter home changes the whole math. A starter home just means something in the lower third of local prices: a condo, a townhome, or a single-family house that’s smaller, older, or waiting on a few updates. In Westchester, that distinction carries real weight. A median single-family home here now runs just under $1 million, while a median condo or townhome sits closer to $550,000. That’s not a small gap. It’s a completely different down-payment target and a completely different monthly payment. And a starter home does something a mid-priced “forever home” can’t do yet. It starts building equity now, and that equity is what funds the move up later. The first house is a doorway, not a destination.

You almost certainly don’t need 20% down. This assumption inflates the timeline most, and it’s the one most buyers believe without question. In practice, most first-time buyers put down far less. National Association of Realtors data puts the median first-time down payment at about 10%, and plenty of loan programs go lower still. Set a 10% down payment against a starter-home price instead of 20% against a mid-market one, and the years of saving can shrink from a decade to a few years.

An adjustable rate mortgage can lower the cost of getting in. The second lever is the loan. A fixed rate holds steady for the life of the mortgage, which many buyers find reassuring. An adjustable rate mortgage (ARM) works differently. The rate is locked for an opening stretch, usually five, seven, or ten years, then adjusts with the market after that. The uncertainty isn’t for everyone, and that’s a fair reservation. But an ARM typically opens at a lower rate, and that can mean a smaller payment from the very first month.

ARM rates have recently been running more than a full percentage point below a 30-year fixed, and Bankrate tracks that gap live. This past September, it was running over a full point, though it moves with the market.

When the fixed period ends, this is what happens. Hesitation is common here, so it’s worth being clear about your options once that opening window closes. You’re not stuck. You can keep the loan if the adjusted payment still works for you, refinance into a fixed rate and lock a payment that never moves again, or refinance into a new ARM with a fresh fixed stretch. Choosing an ARM at the start keeps your options open; it doesn’t close them.

There are more routes into a first home than the 15-year headline suggests, and the right ones depend on your situation, your market, and your timeline. That’s the part we’ll sit down for.

Show me where you are and I’ll run your real numbers, walk through the what-ifs, and map out what buying could actually look like for you. Call or text me at 1-914-548-6179, email me at ted.holmes@raveis.com, or visit blog.theholmesteamny.com. Let’s figure out how close your first home really is.