According to recent data from ApartmentList.com,
“The first half of 2021 has seen the fastest growth in rent prices since the start of our estimates in 2017. Our national rent index has increased by 11.4 percent since January . . . .”
Those rising rental costs may make it seem impossible to prepare for homeownership if you’re a renter. But the truth is, there are ways you can – and should – prepare to purchase your first home. Here’s expert advice on what to do if you’re ready to learn more about how to escape rising rents.
1. Start Saving – Even Small Amounts – Now
Experts agree that setting aside whatever you can—even small amounts—into a dedicated savings account is a great starting point when preparing for a down payment. As Cindy Zuniga‑Sanchez, Founder of Zero‑Based Budget Coaching LLC, explains:
“I recommend saving for a home in a ‘sinking fund’ . . . . This is a savings account separate from your emergency fund that you use to save for a short or mid-term expense.”
She adds that saving in smaller increments can make a large goal—such as saving for a down payment—more achievable:
“Breaking up your goals into smaller bite‑sized pieces by saving incrementally can make a large daunting number more manageable.”
2. Assess Your Finances and Work on Your Credit
Another expert tip: review your overall finances and credit score, and find ways to reduce your debt. According to the HUD, the average credit score of first-time homebuyers is 716. If you don’t know your credit score, use online tools to check it. If it’s below that average, don’t worry—plenty of homeowners are below 716. To improve your credit before applying for a loan, HUD recommends:
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Reducing your debt
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Paying bills on time
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Using credit cards responsibly
3. Start the Conversation with Your Advisor Today
Finally, talk to a trusted advisor who understands the market and knows the steps to becoming a first-time homebuyer. A real estate or lending professional can help you:
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Navigate your specific market
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Determine what you can afford and when you should get pre-approved
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Understand how achieving homeownership is actually within reach
As Lauren Bringle, Accredited Financial Advisor with Self Financial, puts it:
“Don’t write home ownership off just because you have a low income . . . . With the right tools, resources and assistance, you could still achieve your dream.”
Bottom Line
If homeownership is your goal, the best thing you can do is start preparing now—even if you don't plan to buy for several years. Let’s connect today to discuss your path forward and set you up for success.
