How to Become a Homeowner on a First-Time Buyer’s Budget

 

It's not easy being a first-time homebuyer right now. At the end of last year, housing affordability hit an all-time low.[1] Additionally, mortgage rates have risen significantly since 2021, while inventory remains tight for many property categories, but especially for starter homes.[2]

 

As a result, many first-time homebuyers are finding that they need to get creative or risk renting for longer than they planned. If you, too, are struggling to afford homeownership, here are some workarounds to consider as you plot your first home purchase.

 

1. Try House Hacking

“House hacking” is a real estate investment strategy in which participants use their homes to generate income in order to offset their expenditures. For example, renting out a basement apartment or taking on a roommate.

 

In some cases, house hacking may make it possible for you to qualify for and afford your first home. A lender, for example, may approve you for a larger mortgage if you purchase a property with immediate income potential.[3] It could also help you pay your mortgage once you move in. For example, you could rent out your swimming pool for a few hours or lease out your garage for paid parking.

 

But before you make plans to house hack, make sure you fully understand an area's laws and HOA rules. We can help you find a home with income potential in a neighborhood with less restrictive zoning and regulations.