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In this competitive housing market, buyers are willing to make some concessions to either cut costs or land their dream home.
Some 58% of U.S. adults would be willing to take action to find housing that is more affordable, with Gen Z and millennials more likely to do so than older generations, a survey from Bankrate.com found. That includes moving to a cheaper area and buying a fixer upper.
To be sure, home prices are still high, thanks to continued low inventory. In April, the median price of an existing home sold was the highest on record at $391,200, an increase of 14.8% from a year ago, according to the National Association of Realtors.
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“Wages are going up a bit, but these price increases are really squeezing Americans who want to buy homes,” said Bankrate.com analyst Jeff Ostrowski.
“Now that mortgage rates have risen pretty dramatically, there is an affordability crunch really affecting first-time buyers.”
The mortgage rate on a 30-year fixed loan is now 5.36%, according to Mortgage News Daily. That’s up from 3.29% at the start of the year.
Between home prices and higher mortgage rates, buyers’ mortgage payments are about 50% higher than just a year ago, according to Realtor.com data.
Considering new areas
That affordability crunch has some considering different neighborhoods or even states. Just over a quarter of U.S. adults are willing to move out of state, Bankrate’s survey found. In addition, 20% would move farther away from family and friends, 13% would move farther from work and 11% would consider moving to a less desirable area.
With the rise of remote work, rethinking your geographic boundaries may make sense. Yet, remember that picking up your life and moving can be stressful and difficult if you are moving away from a support system, for instance, Ostrowski said.
“If you really want to go to a different market, rent a place for a few months or a year and get to know the area,” he advised. “See if you really want to live there.”
Opting for a fixer upper
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You are likely to get a better deal on a house that needs work. Just remember that renovations can require a lot of effort and often take longer and cost more than expected, said Ostrowski, …….