That’s right—according to a recent study from Zillow, in 22 of the 50 largest metro areas, monthly mortgage payments are now lower than rent payments (see chart below):

As mortgage rates have eased off their recent peak, home prices have moderated, and inventory has ticked up, affordability has improved significantly. When you add all of that up, it’s getting less expensive to buy a home than to rent one in many parts of the country.

This is a big deal if you’ve been renting for a while now. But if you don’t see your city on this list, don’t sweat it. Things are moving fast, and your area might be joining these top metros soon.

You see, talking with a local real estate agent about what’s happening in your market before this happens in your ideal neighborhood could really change the game for you. It’s all about being informed by a true expert, and understanding what was out of reach before might actually be getting more affordable than you think. 

Now, while this study compares monthly rent to principal and interest on a mortgage payment (not the whole monthly payment), let’s think through this. As Zillow notes, what you can’t ignore when you buy a home are things like taxes, insurance, utilities, and maintenance that should also be factored into your budget and your monthly payment.

But remember – renters pay extra fees too, like renters’ insurance, utilities, parking, and more. And while doing the math may feel like a drag, this equation could be a much more exciting one to work through today.

So, grab your calculator and your agent because the big takeaway is this: it may be time to determine if you’re in a spot to afford what you couldn’t just a few months ago.

As Orphe Divounguy, Senior Economist at Zillow, says:

“… for those who can make it work, homeownership may come with lower monthly costs and the ability to build long-term wealth in the form of home equity — something you lose out on as a renter. With mortgage rates dropping, it’s a great time to see how your affordability has changed and if it makes more sense to buy than rent.”

Whether you live in one of these budget-friendly metros where the scales have already tipped in your favor, or any town in-between, it’s time to connect with a local real estate agent to get the conversation started.

With mortgage rates coming down and more homes hitting the market, you’ll want to be ready to jump back into your search – before everyone else does.

Bottom Line

If you’re tired of renting and ready to find out what it takes to purchase a home in your area now that the landscape may be shifting, connect with a local real estate agent to do the math and see if buying a home makes sense for you now or sometime soon. 

When it’s time to buy or sell a home, one of the most important decisions you’ll make is who you’ll work with as your agent. That choice will have an impact on your entire experience and how smoothly it goes.

As you figure out who you’ll partner with, it’s important to know what to expect and what to look for. Unfortunately, there may be some myths holding you back from making the best decision possible. So, let’s take some time to address those, and make sure you have the information you need to find the right agent for you.

Myth #1: All Real Estate Agents Are the Same

You might think all agents are the same – so it doesn’t matter who you work with. But, in reality, agents have varying levels of experience, specialties, and market knowledge, which can have a big impact on your results. For example: you’ll get much better service and advice from someone who is a true expert in their field. As Business Insider explains:

“If you were planning to get your hair done for a special event, you’d want to visit a stylist who specifically has experience doing that type of work — you wouldn’t make an appointment with someone who primarily does kids’ hair. The same concept applies to finding a real estate agent. If you have a smaller budget, you probably don’t want to work with an agent who exclusively sells multimillion-dollar properties.”

Take some time to talk with each agent you’re considering. Ask about their experience level and what they specialize in. This will help you find the one that’s the best fit for your search.

Myth #2: You Can Save Money by Not Using an Agent

As a seller, you may think you can save money by not working with a pro. However, the expertise, negotiation skills, and market knowledge an agent provides generally saves you money and helps you avoid making costly mistakes. Without that guidance, you could find yourself doing something like overpricing your house. And that’s a misstep that’ll cost you when it sits on the market for far too long. That’s why U.S. News Real Estate says:

“When it comes to buying or selling your home, hiring a professional to guide you through the process can save you money and headaches. It pays to have someone on your side who’s well-versed in the nuances of the market and can help ensure you get the best possible deal.”

Myth #3: Agents Will Push You To Spend More

You may also be worried an agent will push you to buy a more expensive house in order to increase their commission. But that’s not how that should go. A good agent will respect your budget and work hard to find a home that truly fits your financial situation and needs. With their market know-how, they’ll point you toward the best option for you, rather than try to pad their own pockets on your dime. As NerdWallet explains:

“Among other things, a good buyer’s agent will find homes for sale. A buyer’s agent will help you understand the type of home you can afford in the current market, find listed homes that match your needs and price range, and then help you narrow the options to the properties worth considering.”

Myth #4: Market Conditions Are the Same Everywhere, So Why Do I Need a Pro?

Maybe you believe housing market conditions are the same no matter where you are. But that couldn’t be further from the truth. Real estate markets are highly localized, and conditions can vary widely from one area to another. This is why you can’t pick just anyone you find online. You should choose an agent who’s an expert on your specific local market. As a recent article from Bankrate says:

“Real estate is very localized, and you want someone who’s extremely knowledgeable about the market in your specific area.”

You’ll know you’ve found the right person when they can explain the national trends and how your area stacks up too. That way you’re guaranteed to get the full picture when you ask: “how’s the market?”

Bottom Line

Don’t let myths keep you from the expert guidance you deserve. With market knowledge and top resources, a trusted local real estate agent isn’t just helpful, they’re invaluable.

In what could be one of the biggest financial decisions of your life, having the right pro by your side is a game changer. Connect with an agent to make sure you get the best outcome possible.

Believe it or not, almost 80% of first-time homebuyers qualify for down payment assistance, but only 13% actually use it. And if you’re hoping to buy a home, this is a mission-critical gap to close – fast (see graph below):

Here’s what you need to know to make the most of your down payment in today’s housing market.

Amplify Your Down Payment Potential

For first-time buyers, the name of the game with down payments is making sure you’re taking advantage of all the resources out there designed to help you. And a bunch of them can get you to your goal faster than you may have thought possible.

For example, there are loan options that require as little as 3% down, or even 0% for certain qualified borrowers, like Veterans. And let’s not forget down payment assistance, like grants and other opportunities, that help you cover the upfront cost of your down payment.

If you’re interested in exploring those options and what you may be able to use to your advantage, connect with a trusted lender. Because if you don’t at least see what’s available, you could be leaving money on the table and missing your chance at buying a home. These resources can boost your down payment. And a higher down payment could help lower your eventual monthly mortgage payment, and even avoid or reduce your fees like private mortgage insurance.

Don’t Let News Headlines About Down Payments Scare You

There’s one more thing to address. News coverage has been talking about how the typical down payment is rising. A report from Redfin states:

“The typical down payment for U.S. homebuyers hit a record high of $67,500 in June, up 14.8% from $58,788 a year earlier . . . This was the 12th consecutive month the median down payment rose year over year.”

But don’t let those high dollars scare you. Just because the average down payment is rising doesn’t mean down payment requirements are going up. That’s a key piece of the puzzle to understand. It’s really just because people are choosing to put more down to try to offset higher mortgage rates, and current homeowners who are putting their equity to work are using that to increase their down payment on their next home. As HousingWire explains:

“. . . buyers are putting down a higher percentage of the purchase price to lower their monthly mortgage payment. And buyers also had more equity from their home sales, which gives them more cushion.”

Let’s break those two reasons down a bit:

1. A bigger down payment helps lower your monthly mortgage payment. Affordability has been a challenge for many buyers recently, which is why those who have the ability to make a bigger down payment are going to do so in an effort to lower their future housing costs.

2. Buyers who already own a home have a record amount of equity to leverage. Someone who bought a home a few years ago has gained a significant amount of value in their house, thanks to home price appreciation. These people can put down much more than the average first-time buyer who hasn’t owned a home yet.

Bottom Line

What’s the best thing to do? Talk with a trusted lender about your options. They’ll help you figure out where you stand today and how to access the resources you may qualify for. Because help is out there, you just need to work with a pro to take advantage of it.

Some Highlights

• Mortgage rates are trending down and that’s great news for your bottom line.
• As rates drop, your monthly payment on your next home does too. Even a small change in mortgage rates can have a big impact on your purchasing power.
• If you put your search on hold when mortgage rates were higher, think about how much you could save now that rates are coming down.

Even though affordability is improving, buying a home can still feel tough right now. But here’s some good news: builders are focusing their efforts on building smaller homes, and they’re offering key incentives to buyers. And both of these things can be a big help if you’re worried about finding a home that’s right for your budget. 

Builders Are Building Smaller Homes 

During the pandemic, homebuyers were looking for larger homes—and many could afford them. Builders responded to that demand and created bigger spaces to help people with things like working from home, setting up home gyms, and having extra rooms for virtual school.

Now, with affordability as tight as it is, builders are turning their focus to smaller single-family homes. Data from the Census shows how significant this trend toward smaller new homes has been over the last couple of years (see graph below):

But why would builders want to build smaller homes right now? At the end of the day, builders are going to focus on building homes that meet current market demand – because they want to build what they know will sell. And the number one thing homebuyers are looking for right now is better affordability. Since smaller homes typically come with smaller price tags, both buyers and builders have shifted their focus to homes with less square footage. The National Association of Home Builders (NAHB) reports:

 “. . . home buyers are looking for homes around 2,070 square feet, compared to 2,260 20 years ago.” 

And according to Orphe Divounguy, Senior Economist at Zillow:

“Not only are cash-strapped buyers continually seeking out lower-cost options, but developers are changing what type and size of home they’re producing to try and meet that need.” 

How a Newly Built Home Can Help You Achieve Your Homebuying Goals

So, if you’re having a hard time finding something in your budget, it may be time to look at brand-new homes that have a smaller footprint. When you do, you may get a few other fringe benefits that can help on the affordability front – like price reductions or mortgage rate buy-downs.

According to the most recent data from Zonda, more than half of builders are offering incentives, some of which are mortgage rate buydowns. And those perks could help lower your future monthly housing payment too. John Burns, CEO of John Burns Research & Consulting, shares:

“The monthly payment matters more than anything else and builders have responded with smaller, more efficient homes.”

Not to mention, with new home construction, you’ll also get brand new everything, have fewer maintenance needs, and get some of the latest features available. That’s worth looking into, right?

Bottom Line

With builders focusing on smaller homes, you have more budget-friendly options when it matters most. If you’re thinking about buying a home soon, work with a local real estate agent to see what’s available where you want to live.