Rising Home Prices, Smarter Strategies
As of May 2024, the median U.S. home price reached $419,300. With prices that high, many people are choosing to rent while they plan their next financial move. Renting isn’t just a short-term solution — it can be a smart way to prepare for future homeownership.
1. Use This Time to Strengthen Your Savings
Renting gives you the flexibility to save money without the added costs of homeownership, like maintenance, property taxes, and unexpected repairs.
Here’s how to put that savings power to work:
Automate your savings: Set up automatic transfers to a savings account each payday.
Try micro-investing apps: Tools like Acorns or Stash can help you build wealth gradually.
Max out retirement savings: Take full advantage of 401(k)s, IRAs, or employer matches.
In fact, 38% of buyers in 2021 were renters first. Building a strong financial base while renting can help you become one of them when the time is right.
2. Make the Most of Your Rental Situation
Being a smart renter can also help your long-term goals:
- Negotiate lease terms: Don’t be afraid to ask for better rates or renewal terms.
- Lock in longer leases: A 12- or 24-month lease can help avoid rent increases.
- Research growing neighborhoods: Consider renting in areas that are on the rise. These may be good future locations for buying.
3. Invest in Your Skills and Income
If you’re not buying a home yet, use this time to focus on building your income and career potential.
Here’s what that could look like:
- Earn certifications or licenses in your field to improve your job prospects.
- Start a side business to increase your income and savings.
- Network with professionals in your area or industry to uncover new opportunities.
4. Explore Alternative Ways to Get Into Real Estate
Even if you’re not buying a home now, there are ways to begin investing in real estate:
- Real Estate Investment Trusts (REITs): Buy shares in real estate through the stock market.
- Fractional ownership platforms: Some online tools allow you to invest in parts of a property.
- House hacking: When you are ready to buy, consider a multi-unit property where you live in one unit and rent out the rest.
Renting Can Be a Step Toward Ownership
Renting doesn’t have to mean delaying your financial goals. With smart planning and consistent saving, you can turn your rental years into a solid foundation for future homeownership. As financial advisor Ramit Sethi puts it, “The best time to buy a home is when you can afford to.” Until then, renting can be part of a long-term wealth-building plan.
If you're thinking about buying in the next 6–18 months, now is the time to start preparing.
Looking to buy a home down the road? Let’s create a plan now to get your finances ready for the right time to buy.