In 2022, the average price of a home in the U.S. is $428,700, up from about $350,000 in 2021.
As a prospective homeowner, this isn’t what you want to hear. Home prices are going up, which means affording a house is becoming more difficult for many buyers. Unless you dig deeper into your pocket, owning a home will be a distant dream.
Don’t give up all hope yet, though.
Even in a pricey housing market, buying a house is still possible. However, you need to know how to work your way around such a market.
In this article, we’re sharing practical advice on how to afford a house. Read on!
1. Consider a Manufactured Home
Like the typical homebuyer, you’re looking for a traditional, site-built house, could be an apartment, a single-family detached house or a duplex. You probably haven’t thought about manufactured homes. Maybe you don’t even know what these homes look like.
For starters, a manufactured or modular home is pre-fabricated in factories and transported to an installation site, either as a whole or in parts. These homes are about 15-20% cheaper to assemble than site-built homes. This makes them more affordable than typical homes.
So, if you aren’t in a position to afford the home of your dreams right now, look into modular homes. Plus, they appreciate more or less at the same rate as other homes in an area.
2. Look for a Cheaper Property
Modular homes aren’t for everyone, so it’s understandable if you still want a site-built property.
If you’re being priced out of the market, it’s because your ideal home is costlier than you expected. How about you try and find a home that’s less-than-ideal?
Perhaps you were eying a 4-bedroom single-family detached home in an upmarket neighborhood. How about looking for a similar-sized property but in a second-rate area? Prices will be lower and may fall right into your financial range.
If the idea of settling for a second-rate neighborhood doesn’t appeal to you, perhaps you can opt for a smaller house for now. Later on, you can upsize.
3. Go for a Cash Purchase
Although most homebuyers get mortgage financing, about 20 percent of home sales are cash deals. If you’ve got some money sitting somewhere, using it to buy a house instead of going in for a mortgage can reduce your homebuying costs.
A home loan attracts an interest, and closing costs are higher. In a cash deal, you don’t necessarily need the help of any closing professionals, so your closing costs will be lower.
Plus, some sellers love cash purchases because they’re fast – unlike mortgage deals which can take about a month. Being a cash buyer can give you some negotiating power, especially if you establish that your seller is looking to close the deal quickly.
Affording a House Needn’t Be Difficult
Affording a house in this economy can seem out of reach for most people. But if you’ve been saving up for a house for some time, you shouldn’t be quick to exit the market because the cost of a house is sky-high. With this article, you now know some of the options you can pursue to become a homeowner affordably.
Stay tuned to our blog for more homeownership advice.