Can You Afford to Buy a House This Year and Stop Renting? Here Are Some Tips

Hopeful homebuyers that worked hard and saved money last year might discover that it’s still difficult to find a home that they can afford this year.

The road to homeownership has gotten more expensive, but there’s some good news. The median home prices are still well above $400,000, but prices did decline by $15,000 in August. 

July’s uptick in active listings reached a record high, which could be an indicator that t he home market could be moving toward rebalancing, which we haven’t seen since the  not seen since the COVID-19 outbreak created a seller’s market.

Before you abandon the idea of purchasing a home and wash your hands of the volatile housing market, we have some tips to share. 

Starter Homes

While you shouldn’t buy a house just to be a homeowner, you need to be willing to compromise on what kind of house you want. A starter home is going to have less square footage, fewer bedrooms, and the finishes won’t be top of the line. However, if you plan on living there for more than five years, you’re going to build equity. You can then take that equity and find a home that does check off all of your “wants.”

Negotiation Is Key

Properties that once were snatched up as soon as they came on the market aren’t going as quickly. If you’re a bargain hunter, this might be your best chance to make an offer below asking price.

Keep Waiting and Save Up

If you’ve been waiting this long to buy a house, maybe you might want to consider waiting a little longer for the market to fully right itself. While there’s significantly fewer people eager to buy in comparison to the past few years, there are still motivated sellers out there who want to sell quickly.

Also, while you continue to wait to make your move, you should definitely continue to save your money because the more you can save for a downpayment, the less you’ll have to borrow. That means lower mortgage payments and if you’re able to put down 20%, you’re not required to get private mortgage insurance.

Get Pre-Approved

Even during peak US housing market conditions, getting pre-approved for a mortgage is a solid piece of advice that every real estate agent should offer clients. Once you have your pre-approval letter, you can make offers confidently. You know what you’re approved for. You know how much you can spend. And, perhaps more importantly, sellers see that you have the funds to follow through with the offer. 

When you’re faced with making a big decision like buying a house, of course you’re going to be hesitant when the economy as a whole is under scrutiny. People’s wages aren’t increasing to keep up with inflation. Everything seems to be getting more expensive and the dollar doesn’t go nearly as far as it once has. 

Despite all this, life must go on and all we can do is prepare for whatever lies ahead.

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