Tips for Finding an Affordable First Home
How you define “cheap” is obviously relative, but if you’re buying your first home, affordability is probably at the top of your requirement list. In 2017, 65% of first-time home buyers were 37 years old or younger. With the mean salary in the age group of Americans aged 25 to 34 just $758 per week, and those a few years older not averaging much more, home affordability calculators reveal just how little house you can probably afford. At $40,000 a year, that number is $115,203 – of course, if you’re a dual income household, you’ll be in a much better situation, with a total of $80,000 annually affording a home that’s priced around $429,000.
Depending on what part of the country you live in, that may still be difficult, but there are ways to make finding an affordable home a bit easier.
Consider Older Homes in Well-Established Neighborhoods
A used home is generally going to cost you less than a newly built home. While an older home often needs more in the way of repairs and maintenance, you may be able to get those accomplished over time, making the cost more manageable.
A New Home Through a First-Time Buyers Program
If you’re determined to buy that brand-new house, you may want to look for a local or regional builder that caters to the first-time buyer market. Some areas may have special programs too, for example among Albuquerque homes for sale, both new homes and previously owned homes are available through a first-time home buyers program that offers low move-in costs.
Be Flexible on Location
You may be dreaming of living in a trendy, “hot” neighborhood but you probably aren’t going to find a home that will fit a lower budget there. Whether you rent or buy, prices are always going to be cheaper in less popular neighborhoods, so you’ll need to be flexible and consider more affordable areas. While older neighborhoods may lack amenities like sidewalks, they can make up for that with lower price tags.
Looking outside of a major city is a great way to find cheaper houses that are still within a reasonable commuting distance. Typically, the further away from a major metropolitan area, the lower prices you’ll find. But you’ll need to do some calculations to determine whether that makes sense for your circumstances. Look at how much you earn and how much you can afford to spend on transportation costs like gas. In some situations, you may be better off buying a home closer to the city.
It’s similar when it comes to regions of the country as well. The west and east coasts tend to be the most expensive, while the Midwest and southern regions the least, with some exceptions, of course.
While they aren’t as common as they were a few years ago, bank-owned foreclosures are worth looking into. Not all are in horrific condition, some may just need cleaning and minor repairs, with major components such as electric, heating, plumbing and kitchen appliances still in working condition.