Compromises Homebuyers are Making in 2024

For the first time since 2020, housing affordability is starting to look a little better! Thanks to a drop in mortgage rates over the past year—buyers are getting some relief. That’s great news! But even with this improvement, many people are still finding it tough to afford a home.

Recent data shows that buyers now need to earn around $115,000 a year to afford a typical home, which is about 1.4% less than last year. But here’s the challenge: the average household income is around $84,000—27% less than what’s needed to buy that median-priced home. So, a lot of buyers are having to make compromises. But don’t worry! Making a compromise doesn’t mean giving up on your dream of owning a home. With the right approach, you can still find a home you love without going over budget or sacrificing too much of your wish list.

Let’s break down some of the top compromises homebuyers are making in 2024—and how you can make smart choices that work for you.

The Most Common Compromises Buyers Are Making

A recent survey by Homes.com and Apartment Therapy asked 676 recent and prospective homebuyers (plus some real estate pros) about their home buying experience. Here are the top compromises they found buyers are making today:

Condos and Townhomes Are Growing in Popularity
As single-family homes become harder to afford, more buyers are turning to condos and townhomes as a budget-friendly option. For buyers with a budget under $500,000, about 17% are looking at condos or apartments, and 15% are considering townhomes instead of single-family homes. These options can offer more affordable choices in great locations, and often come with perks like low-maintenance living and shared amenities like pools or gyms. Just remember to factor in any HOA fees when calculating your monthly costs!

Being Open to Different Locations
Everyone loves to live in their dream neighborhood, but with home prices rising in popular areas, many buyers are widening their search. In fact, 21% of recent buyers purchased outside their ideal neighborhood, and one-third of current buyers are considering doing the same. Expanding your search by just a few miles can open up more affordable options that still meet your needs.

How to Make Smart Compromises Without Regret

Making compromises is part of today’s home-buying process, but that doesn’t mean you have to feel like you’re settling. Here are three key tips to help you make decisions you’ll be happy with:

1. Focus on What You Can’t Change
   Cosmetic things like paint or flooring? You can change those later! But things like the home’s layout, structure, and location? Those are much harder (and more expensive) to alter. Prioritize the features that will impact your long-term satisfaction, and don’t get too hung up on the small stuff.

2. Think About Your Future
   It’s important to think not just about what works for you now, but what will work five or ten years down the road. Will the property fit your needs if your family grows or your lifestyle changes? For example, a condo might be perfect for today, but if you’re planning to have kids or need more space soon, it might not be the best long-term solution.

3. Stick to Your Budget
   We get it—stretching your budget to get that perfect home is tempting! But overextending yourself financially can lead to stress later. Set a budget that includes mortgage payments, taxes, insurance, and any HOA fees, and make sure to stick to it. That way, you’re prepared for all the costs that come with owning a home, including those unexpected expenses that tend to pop up after you move in.

Compromise Without Settling

The key to finding a home you’ll love is knowing where to be flexible and where to stay firm. Focus on what matters most, like the location, structural integrity, and whether the home will meet your long-term needs. Be flexible about the less important details, and you’ll find yourself making a smart purchase without feeling like you’re settling. And remember, working with an experienced real estate agent can help guide you through the process and make it all feel much more manageable.

In the end, buying a home is all about balance. With thoughtful planning and a clear understanding of your priorities, your next home could be the perfect mix of compromise and fulfillment—without the stress.