In a housing market where nearly half of Americans worry they may never own a home, we’re facing unique challenges. With the scarcity of available homes for sale and a growing trend of properties selling above asking price, many prospective buyers, including first-time buyers, are feeling disheartened. However, there’s a strategy that most potential homebuyers are unaware of—one that can reveal more affordable options even in the face of stiff competition. Don’t lose hope just yet; here’s how you can become a homeowner faster than you may have thought possible.

Current Market Challenges

One of the most significant issues in today’s real estate market is the sheer lack of inventory. Recent spikes in mortgage rates have created a so-called “golden handcuff” effect, with nearly 82% of homeowners feeling “locked in” by their existing low-rate mortgages, according to Realtor.com. As of September, total housing inventory reached 1.13 million units, a 2.7% increase from August but an 8.1% decrease from the previous year. Unsold inventory now represents a mere 3.4-month supply. To put this into perspective, a healthy market usually maintains around a six-month supply, ensuring supply meets demand. In our current scenario, this shortage of supply is causing prices to increase, as confirmed by NAR Chief Economist Lawrence Yun, who notes, “For the third straight month, home prices are up from a year ago, confirming the pressing need for more housing supply.” This, in turn, is making it increasingly challenging for many buyers, especially first-timers, to find an affordable home.

Competition: The Top Hurdle

This scarcity in the housing market has given rise to what experts describe as the most significant hurdle for homebuyers: competition. With so few homes on the market, multiple buyers often find themselves competing for the same properties. Ultimately, only one buyer will succeed in securing these highly sought-after homes.

The Path to Affordable Homeownership

You don’t have to be discouraged by the competition in the real estate market. We encourage you to explore properties that others may have overlooked or found less desirable, such as fixer-uppers or long-term projects. The idea of a fixer-upper might initially seem daunting, but it comes with numerous advantages. It’s akin to crafting your dream home without the high cost typically associated with new construction.

One prevailing misconception among homebuyers is the belief that home renovation financing is exclusively linked to dilapidated properties or residences that are in such disrepair that they would not pass a home inspection. However, there is a vast array of renovation possibilities that can be financed, such as:

• Renovating bathrooms or kitchens.

• Replacing roofs or gutters.

• Adding extra bedrooms.

• Upgrading flooring.

• Building garages.

• Finishing basements.

• Tackling safety hazards.

• Enhancing accessibility features.

• Installing septic units.

• Creating porches or decks.

• Incorporating energy-efficient features.

• Upgrading plumbing or heating systems.

You might not be aware of the wide array of renovation loan options available. Movement Mortgage offers a variety that can suit your unique needs. Here are some examples you can consider:

FHA 203K STANDARD: Perfect for purchase or refinance, covering virtually any repairs except luxury items, with a low down payment requirement of 3.5% for qualified borrowers.

FHA 203K LIMITED: Ideal for purchase or refinance, covering most repairs except luxury items, structural repairs, renovation additions, and landscaping. It also offers a down payment as low as 3.5% for qualified borrowers.

HOMESTYLE®: Whether for purchase or refinance, this option allows all renovation work, including “luxury” items. It offers down payment options as low as 5% for owner-occupied properties and 10% for second homes.

HOMESTYLE® FOR INVESTORS: Designed for purchase or refinance, allowing all renovation work, including “luxury” items. It provides down payment options as low as 15% for qualified borrowers.

HOMESTYLE® 3% DOWN: Tailored for first-time buyers looking to purchase, with options for all renovation work, including “luxury” items, and down payment options as low as 3%.

We hope this information is insightful and welcome the opportunity to go over these options in more detail so we can help you achieve your real estate goals.