Title: What to Do When You Can’t Afford to Buy a House
Alt Title: 4 Options When You Can’t Afford to Buy a House
Being priced out of the housing market is frustrating – especially when you’ve done the things you were supposed to do. You have a steady income and your credit is decent. You’ve also been saving money every month. And yet the numbers still don’t work, because home prices and interest rates have moved faster than what you’ve been able to accomplish.
If that’s where you are right now, the worst thing you can do is nothing. Not because you need to rush into a purchase you can’t afford, but because there are real, practical options available.
Here’s what’s actually worth considering.
Get Serious About Your Financial Position
Before anything else, it helps to get an honest picture of exactly where you stand and what it would actually take to get you into a position to buy. That means:
- Knowing your credit score and what’s affecting it
- Understanding how much you have saved versus how much you’d need for a down payment and closing costs
- Calculating what monthly payment you could realistically carry without stretching thin
A lot of people have a vague sense that they can’t afford to buy without ever running the specific numbers. Sometimes the gap is smaller than they assumed. Other times, it’s larger, but they now know exactly what they’re working toward. Either way, clarity is more useful than avoiding the topic.
If your credit score has room for improvement, deliberately working on it can actually change the interest rate you qualify for. This has a significant impact on what you can afford.
Look Into First-Time Buyer Programs
This is where a surprising number of eligible buyers leave money on the table. Most people assume they need a 20 percent down payment to buy a home, but that’s not necessarily true.
- FHA loans allow down payments as low as 3.5 percent for qualified buyers.
- VA loans offer zero down payment options for eligible veterans and service members.
- USDA loans provide similar options in qualifying rural and suburban areas.
Beyond federal programs, most states have their own first-time buyer programs that layer on additional benefits like down payment assistance grants, closing cost help, etc.
The key is working with a lender who actually takes the time to walk you through what you qualify for. Many buyers go through a major bank and assume that’s their only option. But a HUD-approved housing counselor or a mortgage broker who works across multiple programs can give you a much fuller picture of what’s available to you.
Consider Buying With a Friend
A Rocket Mortgage survey of house hunters found that 60 percent of respondents were open to or are actively planning to purchase a home with a friend or non-romantic partner. And to be honest, the financial logic is hard to argue with. Two incomes make it easier to qualify for a mortgage. Add on top of that, the split monthly costs make it easy to see how homeownership is more affordable in expensive markets where a single salary might not make it practical.
While this can be a good option, it’s worth mentioning that co-buying with a friend requires some careful groundwork. You’ll want a co-ownership agreement drafted by a real estate attorney. This will cover what happens if one person wants to sell, how ongoing expenses are handled, how major decisions about the property get made, etc. Those conversations can feel awkward to have with a friend, but having them before you buy is way better than trying to navigate a dispute after.
Done thoughtfully, co-buying is a legitimate path to ownership. It’s not for everyone, but for the right two people with aligned goals and a clear agreement, it can make a purchase possible that wouldn’t have been feasible otherwise.
Relocate to a More Affordable Market
If your job allows you to work remotely, your housing options go well beyond the city you currently live in. That’s a significant advantage that not everyone stops to consider.
Markets in the southeast or midwest offer median home prices that are dramatically lower than coastal metros. And it’s not even like you have to sacrifice quality of life. Mid-size cities like Greenville, South Carolina or Huntsville, Alabama have strong local economies and tons of entertainment options. A budget that buys very little in a major coastal market can buy a comfortable home with room to spare in a mid-sized city with a lower cost of living.
Even a partial relocation, meaning moving to a suburb or smaller city within commuting distance of your current job, can shift the math enough to make buying realistic. It’s worth mapping out what the housing market looks like within a 30-mile radius to see what options exist.
The Bigger Point
Just because you can’t afford to buy a house the traditional way right now, doesn’t mean you’ll never be able to own a house. The buyers who eventually get into the market are mostly people who figured out how to creatively address their problem and get their foot in the door.
If you’re willing to roll up your sleeves and get to work, there could be an option available to you!
