When you picture buying your first home, chances are you’re imagining a traditional single-family house with its own yard, maybe a garage, and little extra room to grow. But with affordability still tight, getting everything on that list right away may come with a higher price tag than you’re comfortable with right now.

So, if you’re running the numbers and buying a house like that feels like a stretch, there may be another way in. A condo.

Because in a lot of markets, condos come with a significantly lower price tag. And that could make them a smart way to get your foot in the door.

Condos Can Cost Less Than You Think

According to a recent study by Zillow: 

“Condos are the most commonly affordable home type in virtually every metro. At the starter level, the savings can be pretty significant. Nationally, starter condos average $197,468 — that’s about 6% less than the typical starter home.”

And depending on where you live, the difference can be much bigger. 

Zillow identified metro areas where typical starter condos are priced significantly below the estimated home price a median-income household could afford. Here are the top 10 according to that research (see chart below).

In Houston, the gap is at its widest. There, a typical starter condo was valued at about $85,600 – 72% below the price considered affordable based on the area’s median household income.

Of course, every market is different. But the bigger point is this: if you’ve only been searching for traditional single-family houses, you may be overlooking some of the more affordable options on the market.

And even if your city didn’t make this list, that’s okay. The trend holds true in many places across the country. Here’s why.

A Condo Could Give You a Different Way In

Part of the reason condos can cost less is pretty straightforward. They’re typically smaller. And less square footage can mean a lower purchase price.

So, if you can make do with a bit less space or you’re coming from a smaller apartment now, this can be a great way in. Plus, on the upside, you won’t have to buy a ton of furniture to fill out a bigger house. You can get a potentially lower price up front and spend less once you move in because you’ll need less new stuff to fill that empty space.

And more buyers are making that trade off on space to offset the current affordability challenges. Ali Wolf, Chief Economist for New Home Source, explains:

“In addition to favoring smaller floor plans, more consumers are showing a willingness to live in an attached home. This shift is not driven by a preference for shared walls, but by a pursuit of value.”

That’s really the heart of it. Looking at condos isn’t necessarily about wanting less. It’s about finding another way to make your move happen with the budget you have.

Don’t Rule Out an Option That Could Work

If you’ve been struggling to find a house you like at a price you can comfortably afford, talk to your agent about adding condos to your search.

You may find something in a neighborhood you thought was outside your budget. You could get access to amenities you wouldn’t otherwise have. And you may be able to become a homeowner sooner rather than waiting for the numbers on a single-family house to work.

While there are trade-offs like shared walls, less outdoor space, and an HOA fee to factor into your monthly budget, maybe that’s worth it if you finally get your own set of keys.

Plus, a lot of the times, a condo community comes with great amenities like pools, gyms, and the condo association handles at least some of the maintenance. Which is closer to what you’re used to from your apartment – it could make the transition to homeowner not just more affordable, but that much easier too.

Bottom Line

The first home you buy doesn’t have to be a single-family house. If affordability has been holding you back, talk to a local agent about expanding your search and see whether a condo could fit the price point you’re looking for.

What’s the biggest payment you make every month? If you’re a renter, it’s probably your rent. 

But did you know that you can pay your rent on time, every time, for years, and it may never show up in your credit history? It’s pretty frustrating, especially if you’d like to buy a home someday and you’re trying to build your credit.

The good thing is that’s changing right now. Here’s what you need to know and why it could open a door you thought was closed.

The Problem for Would-Be Buyers

You’re not the only one frustrated. According to Zillow, nearly a third of applicants (32.88%) get denied a mortgage due to insufficient credit history – not missed payments or too much debt. Just not enough credit history for a lender to say “yes.”

It’s the most common hurdle would-be buyers have. As Zillow explains:

“Nearly one-third of mortgage applicants are denied a loan because of insufficient credit history, making it the most common reason for a denial.”

But there’s finally a way in now that how credit gets measured is changing.

The Good News: Credit Is Getting Broader

As Michael Sherman, General Manager and Senior VP at Zillow Rentals, explains:

“Affordability is the headline in housing right now, and access to financing is a very important part of the story. Credit history is a barrier standing in the way of too many potential buyers. Rent reporting is a direct way to address that.”

Here’s what Sherman is talking about. New credit models are emerging that take on-time rent and some utility payments into consideration to help renters get credit for the bills they already pay.

VantageScore is one company with a new credit model that has been approved for use by the Federal Housing Finance Agency (FHFA). And that roll out could have a big impact on renters like you.

A recent study by VantageScore found that nearly 4 million U.S. renters could finally become eligible for a mortgage if their on-time rent payments were counted as part of their credit history. Now, this isn’t a guarantee that it will suddenly count for every would-be buyer, but it does crack open the door.

Here’s the catch though, you still have to walk through it.

Counting Rental Payment History Is Not Automatic

There are more options available to build credit, but you have to be proactive. Your rent won’t necessarily count unless you make sure it does. And the sooner you take credit for your payments, the better.

Here’s how to get started based on a few tips from Experian, the Consumer Financial Protection Bureau (CFPB), and FICO:

• Ask your landlord or property manager if your rent is being reported. If it’s not, opt in. 

• If your landlord doesn’t offer rent reporting, there are services available. Be sure to check fees and which bureaus they provide your data to.

• Check your credit reports for errors. Mistakes happen and fixing them is one of the quickest ways to strengthen your profile. The CFPB offers step-by-step instructions on how to fix errors on your report.

• Follow basic, important credit rules. Pay your bills on time, keep your card balances low, and don’t apply for a bunch of new credit at once.

• Don’t close any accounts – even if you have paid them off and don’t use them often.

• Diversify your profile by getting a secured credit card or becoming an authorized user on someone else’s account to help you build history beyond rent.

These steps take a little time and effort, but it could be worth it if it starts building up your credit history. 

Just remember, not every lender uses the same scoring model and there are more changes on the horizon. So, the sooner you get credit for the work you do, the better. 

Even if you’re not sure when you might be ready to buy a home, talking to a lender is a good place to start. A professional loan officer will help you make a plan and help you figure out a timeline to get ready to officially apply and buy.

Bottom Line

The credit landscape is changing, but action is required on your part. You have to take credit for what you do. And the sooner you get started, the better.

Ready to see where you stand? A quick conversation with a loan officer costs you nothing and could show you you’re closer to owning a home than you think.

With everything going on, it’s understandable if you’re wondering if you’d regret buying right now. 

Everyday expenses cost more. Mortgage rates are higher than you’d like. And when the economy feels uncertain, taking on a mortgage can feel like a much bigger leap. But here’s some perspective that may help…

Most people who already made that leap would do it again.

According to a recent survey from NerdWallet, the vast majority of recent buyers (74%) were glad they bought their current home. Only a very small 3% of people regret it:

And here’s a big reason why so many people feel it was worth it, even now.

Homeownership Is a Long-Term Play

When you’re deciding whether to buy, it’s easy to focus on what’s happening right now. What’s today’s mortgage rate? Are prices going up or down? Those things matter. But don’t get so caught up in buying in the perfect moment that you miss the bigger picture.

A home isn’t typically something you buy for just a year or two. It’s a longer-term play. And when you zoom out, it all starts to fall into perspective – especially if you look at home prices and equity.

According to data from the Federal Housing Finance Agency (FHFA), home prices nationally have risen 33.4% over just the past five years (see map below):

And that appreciation has helped current homeowners build some serious wealth. Research from Bankrate shows homeowners gained an average of nearly $150,000 in wealth over the past five years as equity steadily rose across 90% of major metro areas.

That’s one of the biggest benefits of homeownership. As you pay down your mortgage and your home appreciates over time, your ownership stake – your equity – can grow.

Now, Zoom Out Even Further

The five-year numbers are impressive. But the numbers get even more dramatic when you look at decades instead of individual market cycles.

FHFA data shows home prices nationally have risen 336% since 1991. Sit with that for a second. Three hundred percent (see map below):

That doesn’t mean prices go up every single year. And it doesn’t mean buying is automatically the right decision for everyone today. You should only buy when the numbers (and the payment) work for you.

What it does show is why trying to perfectly time the market can make you miss the bigger picture. 

Over time, homeowners gain a lot of equity. And that equity can eventually become a powerful financial resource. As Freddie Mac explains: 

“Your home’s equity is part of your total wealth as a homeowner. If you decide to sell your home, the equity you have built over time will come back to you in the sale. . .

If it’s time to upsize or downsize, you can use that cash for the down payment on your next home.”

Basically, if you can afford to do it, buying a home now could set you up for future moves.

And just in case you’re someone who’s worried about what happens if prices do fall, after you buy, remember: you’re not buying for one year.

Prices can dip. They have before. But historically, they’ve risen far more over the long run. And the longer you own your home, the more time you have to ride out those ups and downs and keep building equity.

Bottom Line

Don’t let today’s uncertainty make you lose sight of what homeownership can do over time. Most homeowners say they’d make the same choice again. And decades of home-price growth help explain why.

If you’re wondering whether buying makes sense for you right now, connect with an agent to look at the numbers together – and what owning a home could mean for you in the years ahead.