6 obstacles to homeownership—and how to overcome them

Homeownership remains a key part of the American dream—but for many, buying a house still feels just out of reach. In fact, more than three-quarters of would-be homeowners say they’ve faced challenges along the way. Rising living costs, student debt, limited affordable housing, and credit concerns often top the list.

The good news? With the right guidance, affordable loan programs, and strategic planning, many of these barriers are easier to overcome than they appear.

Solutions to 6 hurdles homebuyers are facing

Here are six common challenges homebuyers have reported facing*, along with practical solutions to help you overcome them:

1. High cost of living

Between higher housing prices, inflation, and increased everyday expenses, many Americans are finding it harder to afford a home in their desired area. Nearly half of first-time buyers say the cost of living has made homeownership more difficult.

Solutions:

Explore nearby neighborhoods or suburban areas with lower home prices but similar amenities.
Research federal and state homebuyer assistance programs that can help with down payment or closing costs.
Focus on paying down high-interest debt and look for ways to increase your monthly savings rate to strengthen your homebuying budget.

2. Saving for a down payment

While saving for a sizable down payment is ideal, it’s not always necessary. Many buyers mistakenly think they need to put 20% down—but the median down payment for first-time buyers in the U.S. is closer to 9%. You can still buy a home with far less.

Solution:

Ask your loan officer about low or no down payment mortgage programs such as FHA loans, VA loans, or USDA loans, which require between 0% and 3.5% down.
Look into local and national down payment assistance (DPA) grants and programs designed for first-time or moderate-income buyers.
Set up a separate savings account specifically for your down payment and automate regular contributions.

3. Qualifying for a mortgage

Worried your credit or income might prevent you from qualifying for a home loan? Many Americans are more “mortgage-ready” than they think. Even if you don’t qualify today, working with a loan officer can help you map out a plan to get there.

Solutions

Consider a homebuyer readiness program to address debt or credit challenges before applying.
Ask about government-backed loans like FHA, VA, or USDA loans, which have more lenient requirements.
Strengthen your financial profile by paying off smaller debts, reducing credit card balances, and avoiding new credit lines until after closing.

4. Lack of affordable homes

With limited inventory and rising home prices, many homebuyers struggle to find properties within their budget. Roughly one-third of Americans report difficulty finding an affordable home in their preferred market.

Solutions

Consider expanding your home search radius to include less expensive suburbs or nearby communities.
Look into smaller homes, fixer-uppers, or condos that offer good long-term potential.
Consult your tax professional about federal homeowner tax credits, which may help lower your overall housing costs.

5. Poor credit score

Your credit score plays a big role in the mortgage process. A higher score can help you qualify for better loan terms and lower interest rates, potentially saving you thousands over time. But even if your credit isn’t perfect, it’s never too late to improve it.

Solutions

Make on-time payments—this is one of the strongest factors in boosting your credit score.
Pay down existing debts to keep your credit utilization below 30%.
Review your credit reports for errors and dispute any that are negatively affecting your score.

6. Higher mortgage interest rates

Mortgage rates have increased since the record lows of the pandemic years, but they remain below historical averages. Even small rate changes can, however, affect monthly affordability.

Solutions

Ask your lender about rate locks that can protect you from potential rate increases while your loan is being processed.
Consider a temporary buydown, which reduces your interest rate for the first year or two to ease the transition into homeownership.
Keep improving your credit and debt profile to qualify for the most competitive rates available.

Your Path Toward Homeownership

While the journey may feel challenging, the dream of owning a home doesn’t have to stay out of reach. By working with an experienced loan officer, researching your financing options, and taking small financial steps forward, you can turn today’s obstacles into tomorrow’s opportunities.

If your goal is to buy a home this year, connect with a local mortgage professional to create a custom homeownership plan that fits your budget and lifestyle.