Many Americans believe that it will take them over five years to save for a home purchase due to high prices and increasing interest rates, according to a survey conducted by GOBankingRates. Only about 10% of respondents feel that they could purchase a new home within the next six months, while almost 20% believe they will never be able to afford real estate. In addition, the survey found that women are slightly more confident than men about buying a house within the next five years.
However, experts offer strategies to help potential homeowners speed up the home buying process. One option is to consider FHA loans, which require only a 580 credit score and a 3.5% down payment. This can make homeownership more accessible for many households. Another strategy is house hacking, where individuals can buy an investment property with just 3.5% down and find renters for additional bedrooms or units.
For those willing to take risks, experts suggest looking for underdeveloped communities or undesirable properties that can be fixed over time. This allows individuals to enter the real estate market sooner and start building equity. Moving to a low cost of living area is another strategy to consider, as homes in these areas tend to have lower purchase prices.
Overall, while it may appear daunting to save for a home purchase in the current market conditions, there are options available to help potential homeowners achieve their goal in a shorter time frame.
Source: GOBankingRates survey
Definitions:
– FHA Loans: Loans provided by the Federal Housing Administration that allow borrowers to have a lower credit score and smaller down payment compared to other loan options.
– House Hacking: Buying a property and finding renters for additional bedrooms or units to help cover mortgage costs.
– Underdeveloped Communities: Areas that have potential for growth and improvement in terms of amenities and infrastructure.
– Low Cost of Living (LCOL) Area: An area where the cost of living, including housing prices, is relatively lower compared to the national average.