Can't Afford to Buy a House Where You Live? Here Are Dave Ramsey’s Tips to Survive a Competitive Housing Market

It can be frustrating not to afford a house, but Dave Ramsey's advice may help.

When you are interested in buying a house, it's important to make sure you don't move forward until you are certain you can afford it. Home ownership comes with many expenses beyond just your mortgage payment, and you will be making a long-term commitment to cover these costs every month. If you stretch yourself too thin, this can lead to a lot of stress and make accomplishing any other money goals impossible.

Unfortunately, as home prices have risen in recent years, many people have found themselves trapped in competitive housing markets. If this has happened to you, it's very possible you may feel like you cannot afford to buy any houses where you live. This can be frustrating, but finance expert Dave Ramsey has three important suggestions for how to deal with this difficult situation.

1. Wait to buy and save more money

Ramsey's first suggestion is to simply wait longer to purchase a home and save more money in order to make sure you don't take on too large of a mortgage.

"If you want to buy a home in an expensive market, waiting may be your smartest move," Ramsey said. "In the meantime, keep saving. Your area may seem more affordable three years from now when you have a hefty down payment saved!"

This advice makes some sense since if you can wait and save more money, you can borrow less -- and the smaller your mortgage loan, the cheaper your monthly payment. Ramsey is also right that it is possible housing prices will fall over the coming years, so you could potentially get a better deal by waiting.

Of course, the flip side is that homes could keep going up in value where you live and mortgage rates could keep rising so you could end up saving for years only to find that properties have become even more expensive and are still out of reach for you. It's impossible to predict if this will happen or not, but you need to be aware of this possible risk to delay.

2. Reconsider what you need in a house

Ramsey also advised scaling down your expectations when houses seem too expensive.

"Another option is to revisit your must-have list," The Ramsey Solutions blog reads. "A remodeled four-bedroom craftsman home on an acre lot might be out of your price range, so think about what you can change. A three-bedroom home, a half-acre lot or a ranch-style house that needs a little work could be a perfect financial fit."

This is also a great idea if you are being unrealistic about what types of homes are in your price range. You don't have to wait for the perfect house to buy. In fact, many people purchase a starter home and then move up to a more expensive one as their income increases or if their initial property goes up in value so they can sell at a profit.

In some markets, though, this advice won't work because there are certain areas where even the cheapest homes are out of reach for many middle-class and lower-income families.

3. Consider whether a move could make sense

Finally, Ramsey suggests thinking about moving if you find yourself looking at very high housing costs.

"You may be stuck in a market where homeownership will always feel a little out of reach (we’re looking at you, Silicon Valley)," Ramsey said. "But if you’re open to moving, relocating can fast-track your home-buying dream."

When it is practical for you to move based on your job, this could be the best and easiest way to get a home that's within your budget. While this won't work for everyone, if you're able to relocate, it's definitely something to consider when you find that you want to be a homeowner but can't afford to become one in your current area.