Can’t afford to buy a home? Try this plan

Home price gains continue to tick up, even with the 30-year fixed mortgage rates hovering around 7%.

The U.S. housing market gained $2.4 trillion in the last year, bringing its total value to $47.5 trillion, according to a Redfin report last week.

“America’s homeowners are sitting pretty. They’re holding a massive amount of housing wealth, despite lackluster demand from buyers, because home values skyrocketed during the pandemic and now a supply shortage is preventing those from falling,” said Chen Zhao, an economics researcher at Redfin. “Prospective buyers aren’t as lucky. The combination of elevated mortgage rates, high home prices and a limited pool of homes for sale means homeownership is about as unaffordable as ever.”

Zhao said the lone bright spot is mortgage rates should start declining before the end of the year.

After three straight months of gains, U.S. consumer confidence unexpectedly retreated in February, according to the Conference Board consumer price index. Business, employment and the U.S. political environmental were among the concerns of survey respondents, the Conference Board said.

Lower mortgage rates increase affordability. Even so, more home price spikes are likely as buyers jump back into the market. We’ve seen this familiar pattern during the pandemic days.

So what is a homebuyer to do right now?

Do you still qualify?

First, start by revisiting expectations compared with an actual credit approval. Crunch the numbers with a lender.

Almost everyone I take loan applications from is already stretching to his tippy-toes. Since mortgage rates and home prices have moved up again, it’s worth considering if you still qualify for the same sales price.