Can You Use Retirement Savings to Buy Your First Home?

What NAR's Column Actually Says

On July 22, 2026, the National Association of Realtors® published an Economists' Outlook column titled "Using Retirement Savings to Buy a First Home," written by economist Nadia Evangelou. It discusses the tradeoff between keeping savings invested and using a portion toward a down payment on a first home, and it compares that tradeoff under an illustrative set of assumptions.

For its comparison, NAR uses a 10% assumed annual stock-market return and looks at $50,000 either invested or applied toward a $400,000 home. NAR also cites its own historical analysis that typical U.S. homeowners gained close to $232,300 in equity over the prior ten years. Both figures are NAR's, not mine, and both are illustrative national analysis — not a forecast for any particular property or year.

You can read NAR's column directly at nar.realtor. Please read the source alongside this page.

The Current $10,000 IRA Rule

U.S. tax law currently allows a qualified first-time homebuyer to take up to $10,000 (a lifetime, per-individual amount) out of an IRA without the 10% early-withdrawal penalty. Traditional IRA dollars withdrawn this way can still be subject to ordinary income tax; Roth IRA rules differ. This is a general summary, not tax advice — the current-year rules, thresholds, and qualification tests should be confirmed with a CPA and with IRS resources before any withdrawal.

Nothing on this page should be read to say the $10,000 is "tax-free." It is a penalty exception under specific conditions.

The Proposed $50,000 Bill (Not Current Law)

The Uplifting First-Time Homebuyers Act is a proposal that would raise the IRA first-time homebuyer exception from $10,000 to $50,000. As of the update date at the top of this page it has been introduced but has not been enacted. Do not plan a purchase around a bill that is not law. If the proposal is signed into law, this page will be updated with the final enacted terms.

NAR's Hypothetical Tradeoff, Fairly Represented

NAR's column presents the comparison this way: under a 10% assumed annual return, $50,000 kept invested in the stock market grows to a much larger figure over a long horizon; used instead as a down payment on a $400,000 home, that same $50,000 unlocks homeownership and — in NAR's national historical analysis — the typical U.S. homeowner gained nearly $232,300 in equity over the prior ten years.

A 10% assumed return is a common illustrative figure but is not a forecast, and past equity gains are not a guarantee for any specific home in any specific Philadelphia suburb. Different return assumptions, different holding periods, and different home-appreciation paths change the picture materially. The value of the NAR framing is that it forces both sides of the tradeoff onto the same page — not that either number is a prediction.

A Simple Decision Framework

1. Ask a licensed lender for a written comparison of your loan options at 3%, 5%, 10%, and 20% down for your target price and county.
2. Ask a CPA to model the tax impact of any Traditional IRA withdrawal you are considering.
3. Ask a fiduciary financial advisor to model the long-horizon opportunity cost of the withdrawal under conservative return assumptions — not only the 10% used in NAR's illustration.
4. Ask your retirement-plan administrator, in writing, exactly what your plan permits and what happens if your employment changes.
5. Only after those four written answers, decide whether touching retirement funds still makes sense.

Philadelphia Suburbs Considerations

Home prices, property taxes, and school-district costs vary across the western Philadelphia suburbs, so a general national framing only takes you so far. In Wayne, Malvern, and surrounding towns across Chester, Montgomery, and Delaware counties, your total monthly cost depends on the specific township millage, school district, HOA (if any), and condition of the property — not just the sticker price.

For your target town and price band, a written buyer plan can show realistic ranges for monthly payment, property taxes, and closing costs so your CPA and lender are working with real local numbers rather than a national average.

Before You Withdraw a Dollar — Checklist

• Written loan-option comparison from a licensed lender.
• Confirmation in writing from your retirement-plan administrator on what your plan actually allows.
• CPA sign-off on the tax cost of the specific withdrawal.
• Fiduciary-advisor review of the long-horizon opportunity cost.
• A local buyer plan for your target Philadelphia suburb, including realistic taxes and closing costs.
• A cash reserve for inspections, moving, and post-closing repairs — not just the down payment.

Alternatives Worth Pricing First

Before tapping retirement savings, most first-time buyers I meet have not yet fully priced the alternatives available to them. Ask a licensed Pennsylvania lender to walk you through first-time-buyer program options, low-down-payment loan types, and any employer or family down-payment assistance you may qualify for. The right answer for your household may not require touching an IRA at all.

Source and Attribution

Primary source: Nadia Evangelou, "Using Retirement Savings to Buy a First Home," National Association of Realtors® Economists' Outlook, published July 22, 2026 — https://www.nar.realtor/news/economists-outlook/using-retirement-savings-to-buy-a-first-home. National statistics, the 10% return assumption, the $400,000 home example, and the roughly $232,300 ten-year equity figure are NAR's — attributed here, not mine. Local commentary is the author's, based on client conversations in the Philadelphia suburbs.