Home Prices Are Still High. Here's How to Open Up Your Buying Options
Struggling to find an affordable home? Here are some options to consider.
Ask anyone who's looking to buy a home today what prices are like, and the answers might range from "high" to "inflated" to "downright outrageous." In July, home prices were up 19.7% from the previous July. That's a pretty shocking increase in such a short time.
If you're having a hard time finding a home in today's market, you don't necessarily have to give up because prices have soared, but you may need to explore other options. Let's take a look at a few of them.
1. Buy a condo or townhouse
When you buy a condo or townhouse, you own a specific unit within a larger building or complex. You're responsible for maintaining your own unit, but exterior maintenance is generally covered by the homeowners association fees you pay every month.
Often (though not always), buying a condo or townhouse will mean getting less interior space than what you'd get with a standalone house. And you'll often have to forgo a backyard, or at least a large one. Some townhouses have small yards, but if you're buying a condo, the best you can probably hope for is a patio or balcony.
On the plus side, you'll generally pay less for a condo or townhouse than you will for a detached house. And that could be your ticket to owning in today's market.
2. Buy a home jointly with someone else
Buying a home with another person who isn't your spouse can be complicated. You'll need to draw up documents that spell out the terms of your joint ownership, including who's responsible for which costs and maintenance -- and what happens when one person wants to move or sell. But if you partner up with another buyer, then collectively, you may be able to come up with enough money to swing a more expensive home.
Plus, teaming up with another buyer could make it easier to qualify for a mortgage. That way, you'll have two incomes to present to lenders.
3. Buy a property that you can share with a tenant
Part of your goal in buying a home may be to get more privacy. This would especially hold true if you're renting an apartment now and want to stop sharing walls with other people. But given where today's home prices are at, you may be forced to take on a higher mortgage than you can comfortably carry. So buying a home that allows you to take in a tenant could be a smart bet.
The downside of having a tenant is having to play the role of landlord -- and also having to share your space to some degree. But with the right setup, you might manage to retain your privacy.
For example, if you buy a house with a detached garage that can be converted into its own apartment, you can enjoy a stream of rental income without actually having a tenant under your roof. And the income you collect could make your mortgage payments and housing expenses far more manageable.
Today's housing market is certainly a tough one thanks to elevated home prices. If you've been struggling to find a home you can afford, consider these options. And if they don't sound good, you may need to consider pausing your home search and waiting for property prices to come down. Stretching yourself financially to buy a home isn't a good idea, and if you'd rather not compromise in the course of buying a home, then waiting could be your best bet.
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