7 Options if You’re Priced Out of Buying a Home

Quick Answer

If you can’t afford to buy a home in today’s market, try taking these steps, including giving yourself more time, saving money, paying off debt, expanding your search and applying for homebuying assistance programs.

A woman researching homebuying options.

If you're priced out of buying a home, that's likely disappointing—but you're not alone. In 2023, the median sales price of an existing home hit a record high of $389,800, according to the National Association of Realtors (NAR). Coupled with low inventory and, according to NAR, the lowest number of existing-home sales since 1995, it's a tough time to be a homebuyer.

But all isn't lost. You have options if you're priced out of buying a home, including tweaking your search, paying off debt and renting for a bit longer. Here are seven moves to consider.

1. Give Yourself More Time

Pausing your search may be all it takes for market conditions to improve and for your dream home to materialize. Most experts predict that mortgage rates will drop in 2024, which could potentially encourage more homeowners to put their homes on the market and help improve inventory shortages. Lower mortgage rates will make it more affordable to buy a home, and give you more breathing room in your emergency fund and retirement savings.

2. Keep Saving Money

More time also means the ability to keep saving for a down payment, which could make your offer more attractive to sellers. In 2023, the typical first-time buyer made a down payment of 8%, the highest since 1997, according to NAR's 2023 Profile of Home Buyers and Sellers. On a $389,800 home, that's $31,184—and in very competitive areas, a down payment closer to 20% is desirable. Automating your savings and setting aside windfalls like bonuses, gifts and tax refunds will help as well.

3. Pay Off Debt

When mortgage rates are high, as they are right now, take any opportunity to lock in as low an interest rate as possible. That means paying off debt, especially revolving debt on credit cards and lines of credit, which can help increase your credit score. Paying off debt will also reduce your debt-to-income ratio (DTI). Mortgage lenders typically want to see a DTI of 43% or less, and with a DTI of less than 36%, you'll be in an even better position to get a low rate.

4. Stay Connected to Your Agent

Don't lose touch with your real estate agent, as they'll be a great resource for keeping tabs on the areas you want to buy in. Just because there's nothing in your price range now doesn't mean something won't hit the market in a few months. Or, if you or your partner suddenly get a raise and have more cash to work with, staying close with your agent can help you get out that message ASAP.

5. Expand Your Search

You may be able to find a home in your budget if you change up your search. Can you work with fewer bedrooms or bathrooms? A geographic area you'd previously skipped over? An additional 10 minutes of commute time? It can be helpful to have deal-breakers, which help narrow down your options. But in a low-inventory housing market, flexibility goes a long way.

6. Stick With Renting

This one is a mindset shift: It's OK to keep renting, potentially for several more years. It can help to put home ownership into a global perspective. In the fourth quarter of 2023, the U.S. homeownership rate was 65.7%, according to the Federal Reserve Bank of St. Louis. But in Colombia, Germany and Switzerland, for example, renting is more common than owning, according to 2022 research by the Organisation for Economic Co-operation and Development.

With mortgage rates and monthly mortgage payments so high, renting may not be such a bad deal. From 2020 to 2023, the typical monthly mortgage payment on an existing single-family home bought with a 20% down payment more than doubled, according to NAR.

7. Apply for Homebuying Assistance Programs

If you haven't yet looked into state or federal homebuying assistance programs, explore which ones you qualify for. Or, if you expand your search to new areas, see if there are additional programs that could help you afford a home.

First-time homebuyers in particular may have several options in their city or town; FHA, USDA and VA loans can also get buyers in the door with low down payment mortgages. State and federal down payment assistance programs may also be available depending on your income.

The Bottom Line

While it might be disheartening to recognize that you can't afford a home right now, it's likely only temporary. Stick to your plan and continue to take steps to meet it. Every extra dollar you save, every extra point added to your credit score and every additional home that shows up in your search brings you closer to your goal. And if you decide to keep renting for a while, know that's a worthwhile option too.