Home Prices Have Now Risen for 17 Months in a Row

by Maurie Backman | Updated July 19, 2021 - First published on June 18, 2021

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It's getting harder and harder to buy a home -- and those on the hunt for one may be getting weary.

There's a reason today's buyers may be growing increasingly frustrated in their quest to purchase a home. Low mortgage rates have caused a surge in buyer demand, and there's nowhere close to enough housing inventory to keep up with it. As such, home prices rose 14.8% in April compared to a year prior, according to Black Knight. April also marked the 17th straight month of home price gains.

If you're having a hard time finding a home you can afford and you've been searching for months, you may be at the end of your rope. Here are some options to look at if that's the case.

1. Put your home search on hold

Home prices are likely to remain high until housing inventory increases. Usually, lots of homes hit the market during the spring, but that didn't happen this year. And while we could see inventory increase in the summer, it may not happen at a rapid enough pace to bring home prices back down to more reasonable levels.

The solution may therefore boil down to halting your home search and continuing to rent for several more months, or even another year. The good news is that mortgage rates are likely to stay low for quite some time, so don't assume that if you don't buy a place this year, you'll automatically get stuck with a higher interest rate on a home loan.

2. Reset some expectations

It's natural to want to buy a home you'll be comfortable living in, and that may involve having certain amenities you've always dreamed of, like a large kitchen, an extra bathroom, or a master suite. But if you really want to succeed in today's housing market, you may need to ease up on your list of requirements, especially if it's lengthy.

Say there are 10 different items on your wish list. In a normal housing market, you'd be wise to go after them. In today's market, unfortunately, you may not have the leeway to be that picky, especially if you're on a budget. Whittling down your list could help you find a home within your price range.

3. Look at a townhouse or condo

When you think of a townhouse or condo, you may not picture your dream home. But you don't necessarily have to buy your dream home. Rather, you can begin with a starter home and upsize later on.

The benefit of buying a townhouse or condo is that it could be a ticket into the neighborhood you want to live in at a much lower price point than with a standalone home. And while you may have to give up some square footage and privacy, you may also find that you're more than comfortable if you manage to find the right space.

Rising home prices are frustrating a lot of buyers right now, and it's hard to say when those numbers will start to come down. It pays to explore these options if you've been at your search for a while. It's a better bet than continuing to spin your wheels and growing increasingly aggravated by the day.

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