PHOENIX — If home ownership is your goal, financial experts say buyers may have more options right now. The number of homes for sale is at its highest since 2019, according to Realtor.com, while listing prices are down from a year ago. With mortgage rates still around 6.6 percent, experts have tips on how to make your money go further in the housing market.
For Linda Trinh, buying a four-bedroom new build in Peoria, Arizona last year was an investment in her future.
“My real estate agent helped me realize that adding real estate into my investment portfolio actually gives more longevity to my assets,” Trihn said. “That's your money that you can apply to other ventures in your life.”
During the process, she learned that the price tag is not the only number that matters.
“People look at prices of homes. That's the first thing that they look at, but they never take into consideration the rate of what it costs to get a loan to purchase the home,” Trihn said. “So the nice thing about new builds is that they'll work with the agent to try and get the rates down.”
For prospective buyers, Nate Martinez, RE/MAX Fine Properties Managing Partner, says start by knowing your budget.
“The first thing you should do is meet with the realtor. The next thing is getting pre-qualified with the lender, knowing what you can qualify for,” Martinez said.
Then consider all your options, thinking beyond the dream home you may have always envisioned.
“Condos, single family. You can go out buy a brand new house through a new home builder,” Martinez said. “If you have a budget of, let's say $500,000, it may not go very far in downtown, but when you get out to the suburbs, you could probably buy a three- or four-bedroom house.”
Martinez says expanding your search could stretch your budget, but don’t forget added costs.
“The price could be low, but the HOA fees can be high, and that's very important,” he said.
Financial analysts say despite mortgage rate challenges, today’s market may also give buyers more room to negotiate.
“There has been some more inventory, so that has helped,” Ted Rossman, Money Management International Principal Consumer Finance Analyst, said. “We are starting to see buyers gain a little bit of the upper hand. Sellers are having to offer some concessions.”
Experts say shop around for your mortgage, and don’t assume you need 20% down; some loan programs allow less. If you are ready to stay put, the initial costs of home ownership can pay off over time.
“For most Americans, home ownership is a reliable way to build wealth,” Jeff Ostrowski, Bankrate Analyst, said. “The mortgage payment is considered a forced savings, meaning you're essentially paying yourself every month as you pay down the mortgage. And after 10 or 15 years, you should have a pretty nice nest egg of housing equity.”
For Trihn, the right home came down to both lifestyle and the bottom line.
“I got to live close to work, and I got to save a lot of money,” Trihn said. “So that’s always a good thing!”
If you’re not ready to buy, Scripps News also looked at when renting can be the smarter financial move.