Home ownership has been one of the most important dreams for many Americans, and rising prices across the US have created an arduous uphill battle for prospective home buyers. The news of 2021 doesn’t appear to be any better, with existing home prices gaining momentum with each passing month. According to the January 2021 housing report from the National Association of Realtors, existing home prices rose 10.6 percent year-over-year, reaching an all time high of $310,600.
However, there is a silver lining for those saving up to buy a house. Despite the rising prices, your dollar goes nearly twice as far as it did at the end of 2020. It’s a surprising reminder that the real estate market reacts to global events, and even when prices are high, it’s still possible to maximize your money.
So, how can prospective home buyers stretch their dollar? With long-term planning and the right strategies, it’s possible to secure a better deal while finding the right home. Here are a couple of tips to maximize your money when saving to buy a house in 2021:
1. Research the local market. Knowing the specifics of your target location is essential for saving money on a home. Prices vary from city to city, and certain areas may offer more attractive deals. It’s also wise to consider the potential for appreciation and other economic factors before committing to a purchase.
2. Manage your budget. When it comes to obtaining a loan for a home purchase, financial institutions take a close look at your spending habits and financial history. It’s important to manage your budget and pay off debts before making a home purchase. Doing so can improve your chances of being approved for a loan.
3. Negotiate. Don’t be afraid to make a counteroffer if the asking price is too high. Sellers are often open to negotiation, and finding a common ground can save you thousands in the long-run.
4. Consider alternative financing. Conventional mortgages aren’t the only option for home buyers. The rise in popularity in rent-to-own and similar programs makes it possible to get into a home faster and for less money up-front.
By following these tips, and doing some research, it’s possible to make the most out of your dollar when saving up to buy a house. 2021 may be a challenging year to make the American Dream a reality, but it’s still possible.