Aspiring homeowners across the United States are facing a common issue: the affordability of homes.
High home prices, not enough income, and the inability to afford down payments and closing costs are some of the major hurdles potential buyers are encountering, according to a Bankrate.com survey.
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"There is a widespread recognition of affordability issues," Greg McBride, Chief Financial Analyst at Bankrate, said. "But what we also see, particularly among younger would-be homebuyers, millennials and Gen Z-ers, those that are most impacted by affordability."
Residents in Miami are feeling the effects of these challenges.
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"What I'm paying right now for a one-bedroom apartment is what my mom pays for a four-bedroom house in Texas," one resident shared.
Meanwhile, others find it nearly impossible to afford a home in South Florida, with the average home price at $549,154 in Miami, up 10.3% over the past year, according to Zillow.
Roxana Guerrera, a Miami resident, expressed her frustration.
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"It's outrageous, very difficult to live on a regular salary nowadays and live in Miami," she said. "Everything is so expensive to get a tiny little house for an outrageous price.”
The Bankrate.com survey of 2,545 U.S. adults conducted in late March found that in order to find more affordable housing, both homeowners and non-owners are willing to make sacrifices. Thirty-nine percent would downsize their living space, 37% would move out of state, and 30% would buy a fixer-upper.
Greg McBride shed light on the varying trends across the country.
"Although home prices have leveled out and even started falling in parts of the country west of the Mississippi, that is not the case on the East Coast and particularly here in South Florida," he said.
While purchasing a home may seem like an uphill battle in the current market, McBride suggests that with proper planning and strategy, it's still achievable.
"Invest in building up your credit score so you're able to qualify for a larger loan and on better terms at some point down the road," McBride says to aspiring homeowners. "Invest in your career. A higher level of earnings could make homeownership much more attainable and pay down debt and boost savings."
McBride also predicts that mortgage rates may decrease as inflation moderates. However, it's important to remember that rates as low as 3.5% may not return anytime soon. Furthermore, falling mortgage rates might not be the cure-all, as a weaker economy could lead to fewer people buying homes, even with lower rates.
