5 Crucial Steps I Took to Buy a Home in 2024

My history with homeownership is complicated. I've owned a home before, when I was young and on shaky financial ground, and buying it was perhaps the worst money mistake I've ever made.

Near the end of 2021, I decided to attempt the process again -- and I was determined to do better this time. Here are the five steps I took to become a homeowner this year.

1. I got out of debt

After spending my adult life living paycheck to paycheck, relying on debt, and never quite making enough money to get ahead, I was just treading water. Sending money toward high-interest debt payments every month didn't leave me with enough to save for the considerable expenses of owning a home.

Thankfully, I had some tough love in the form of the Certified Financial Planner™ I had recently started working with. He set me straight, and noted that my plan to buy a home with a minimal down payment and high-interest debt wasn't a good one. So I made getting out of debt my first priority, taking on a side hustle and snowballing my debt payoff.

This isn't to say you must be debt free before buying a home -- if you have a car loan or low-interest debt stemming from education, and have income left over every month to save, you are in a better position than I was. But if you have high-interest debt, I recommend focusing on paying that down first.

And as a bonus, I added 100 points to my credit score in the course of paying off debt, pushing me to a FICO® Score over 800.

2. I made building savings a top priority

Once I was free of debt in fall 2022, I kept working hard, but instead of funneling cash to debt, I sent it to a high-yield savings account. The entire buying process is expensive. Yes, you have to cover a down payment and closing costs. But you'll also pay for a home inspection (ideally -- you want to know what you're buying), an appraisal, moving, and more.

I kept padding my savings account throughout the process. This was easily the best move I made, as once I started looking at homes, I could immediately see that my original price estimate had been a bit low for a move-in ready home. If you're more interested in DIY home renovations or want to put your own touches on a home, you can likely save on the purchase price by buying a fixer-upper.

3. I hired an experienced real estate agent

My agent came highly recommended by some local friends, and she's been in the business since before I was born. She's also from my city, and has at least a nodding acquaintance with many other agents and real estate people here.

And best of all, she's a straight shooter who takes pride in matching the right buyer with the right house. I felt confident that she'd be able to help me find the best place for me -- and she was the voice of reason and reassurance throughout the process.

4. I got pre-approved by multiple lenders

Different mortgage lenders have different loan programs and different rates, so the best way to land on the right home loan for you is to apply with more than one. I applied with several lenders with different mortgage rates, from local credit unions all the way up to big online-only mortgage companies. I recommend talking to your real estate agent about lenders too, as depending on your housing market, local funding might matter more.

5. I didn't get discouraged

As you probably already know, the last few years haven't been great for home buyers. Prices are still elevated -- according to the Federal Reserve Bank of St. Louis, the average price of a home sold in Q1 2024 was $513,100. That's up from $383,000 in Q1 2020, before the housing market took off during the COVID-19 pandemic.

Plus mortgage rates are way up since then, too. As of this writing, the average rate on a 30-year fixed mortgage is 6.77% -- in summer 2020, the same mortgage came with an average rate of about 3%.

Those higher mortgage rates also mean that current owners are reluctant to list their homes for sale, because no one wants to trade a 3% mortgage for a 7% one. So the supply lags behind demand, too. The National Association of Realtors found that in May 2024, we had just a 3.7 months' supply of homes for sale -- it would take a supply of closer to six months' worth to equalize the market between buyers and sellers.

It's been worth it -- so far

Despite the longer odds of success, I did my best to keep my chin up. Thanks to hiring a real estate agent with her feet firmly planted in my local market, I learned that my new house would be hitting the market the night before the listing went live. So I viewed it and made an offer that first day. After a nail-biting couple of days, I learned that the sellers accepted my offer, and now I'm writing this from my new home office.

All the work of paying off debt, saving money, stressing over making offers, and moving all my earthly possessions yet again has been worth it so far. If you're hoping to buy a house this year, good luck to you -- if I could make this happen, you can too.