Is It Possible to Find a Forever Home in Today's Market?

It depends on your budget and what you're looking for.

The housing market has been extremely difficult to navigate since the start of 2022. For one thing, home prices are still noticeably elevated -- although home price gains are finally starting to slow compared to the gains sellers were seeing last year and earlier this year. Also, these days, home buyers have sky-high mortgage rates to contend with. When you combine those with higher home prices, it has the potential to create a major affordability crunch.

Given the state of the real estate market today, you may be wondering if it's even possible to find your forever home. The answer? Maybe. But you may have some challenges in that regard.

How much are you willing to compromise?

There are a couple of reasons why you might struggle to find your forever home today. First, as mentioned, homes have gotten expensive to buy between higher listing prices and mortgage rates. So while the type of home you'd want to live in forever may have resulted in a $1,200 monthly mortgage payment a few years ago, today, you might be looking at $2,000 -- or more.

The other factor that might trip you up in your search for a forever home is a continued lack of inventory. The real estate market has more available homes for sale now than it did a year ago. But there's still not enough inventory to meet buyer demand. Because of that, you may end up having to settle for different home features than what you initially imagined.

Ultimately, it is possible to find a home in today's market that you can see yourself living in forever -- or at least, say, until retirement age. But you may need to compromise on certain aspects of that home.

For example, if you can't afford a five-bedroom home due to higher prices and mortgage rates, then you may need to get on board with the idea of being happy in a three-bedroom home. And if your ideal home has a large basement but that feature is hard to find right now in your desired neighborhood due to limited inventory, then you may need to reconcile the idea of not having that extra floor of living space.

Should you wait for your forever home to hit the market before you buy?

It's common for buyers to purchase a starter home and then upgrade to a forever home once their financial situations improve, or once the market becomes more reasonable. Buying a starter home isn't necessarily a poor choice, because that way, you can build equity in that property for a few years before attempting to move on. And that means that instead of spending that money on rent, you'll be putting it into a home and potentially increasing your net worth.

On the other hand, there's a minimum amount of time you'll want to stay in a starter home to come out ahead financially when selling it. It generally takes a few years for homes to gain value. And you'll also need some time to recoup the closing costs you'll pay to put your mortgage into place.

So all told, if you don't think you'll be in a starter home for more than a year or two, then it may not make sense to buy one. In that case, waiting for your forever home could be a better bet.

It's definitely possible to find your forever home in a housing market like the one we're experiencing today. But you may need to adjust your definition of what your forever home looks like.