The Only Obstacle Keeping You From Homeownership
Most people think the current market or interest rates are the problem, but in fact the only obstacle keeping you from homeownership is something you can control. On this week’s episode we’ll discuss what it is and how you can overcome it to buy your first home! Check out the full episode and if you have questions about how to get started with Homeowner Prep, be sure to reach out to us or drop your question in the comments.
What You’ll Learn from this Episode:
- What Makes A Home Expensive
- How To Earn More Money On Your Own Time
- How To Control Your Income
- And much more!
00:00 Overcoming The Biggest Obstacle To Homeownership
00:32 Welcome To The Homeowner Prep Podcast
01:06 Let’s Talk About Interest Rates
01:58 Home Prices Are Too High!
02:51 What Makes A Home Expensive?
03:30 The Only Obstacle…
04:17 How To Control Your Income
04:50 Get Creative
05:46 Earn On Your Own Time
06:58 The Good News
07:19 Getting Started With Homeowner Prep
07:48 Connect With Us On Social Media
“You can’t control what the market is going to be like for interest rates or home prices, but you can control your income.”Eric Hellon
Full Episode Transcript:
First time home buyers feel like there are many obstacles keeping them from buying their first home. But on today’s episode, we’re going to talk about the only obstacle that’s holding you back from homeownership.
Welcome to the Homeowner Prep Podcast, where every week we educate and encourage aspiring homeowners to help them buy their first home faster. If you aspire to own a home, you’re in the right place. So enjoy. Do us a favor and leave a review, a rating, and be sure to subscribe. Now, let’s get to this week’s episode.
Hello, and welcome to another episode of The Homeowner Prep Podcast. I’m your host, Eric Hellon, and on today’s episode, we’re going to talk about the only obstacle that’s holding you back from homeownership. What we’re hearing today in the market is that interest rates are just way too high. In fact, those interest rates topped with high home prices are really what’s keeping people from becoming first time home buyers, but that’s just not the case.
On today’s episode, I’m going to be talking about why I feel that interest rates and home prices don’t really matter. There’s really just one obstacle keeping you from buying your first home. When it comes to interest rates, yes today we’re seeing about seven and a half 8% interest and that may seem high in comparison to the 2.5 and 3% that we saw in 2020, but the truth of the matter is, interest rates tend to be a little bit on the higher side.
Typically about 7% is what you can expect on average over the years. You may have heard that back in the 80s, we actually had double digit interest rates and yeah, we had two and 3% in 2020, but when I got my license back in 2006, we were around six and a half, 7% then. And people weren’t really using interest rates as an excuse as to why they weren’t buying their first home. So we know that interest rates will fluctuate. They will be higher, they will be lower, but at the end of the day, interest rates aren’t keeping you from becoming a first time home buyer.
Addressing that second point of home prices being too high, truth of the matter is, home prices are higher in some markets right now. There are markets that you can go to where you can still find a home for three or $400,000, being that our national average is around that price, but do you want to live there? That’s the question that you have to ask yourself.
Yes, if I go to a really nice neighborhood like here in San Diego, if I go to La Jolla, I can drive around that city and say home prices are just way too high. Well, truth of the matter is that’s the going rate for that area, somebody is willing to pay that price for that area. And so it’s not that home prices are too high, it’s just that the home prices in the area that you want to live in may be higher than what you’re willing to pay.
When you say home prices are too high, you’re saying that they’re actually inflated, and that may not be the reason. We know that home prices are determined by the demand of the market. If somebody’s willing to pay a million dollars for a property, then that’s what that home is worth. When it gets appraised by the bank’s appraiser, they’re going to say that this home is worth a million dollars and at that point, it’s true that home is truly worth a million dollars.
Now, if a million dollars is too high for your budget, then you’re going to say that that house is too expensive, that home prices are inflated, and that homes are unaffordable. That might be true again for the area that you’re looking in, but home prices aren’t the reason why you’re not a first time home buyer.
When it all boils down, the only obstacle that’s holding you back from becoming a first time home buyer is your income. Let me explain. If your income is, say, $3 million a year, would it be expensive for you to buy a million dollar property? Probably not. But if your income is $30,000 a year, buying a million dollar home may be unattainable.
So it all comes down to your perspective based on your income. If you were to raise your income, you can overcome higher interest rates, and you could overcome higher home prices in the areas that you’re looking to buy. The good news is your income is actually controllable.
You can’t control what the market is going to be like for interest rates or home prices, but you can control your income. The way that you control your income is by figuring out ways to make more money. I know it sounds like a lot of work. It is. You’re going to have to find ways to earn more, whether on your job or by starting a side business, in order to increase your monthly income.
If you increase your monthly income, you can overcome any other obstacle, whether it’s interest rates, home prices, credit, whatever the case may be. You now have the resources to overcome all of those other obstacles and buy your first home. So I want you to get creative.
Think of ways to increase your income. We all have 24 hours in a day. We have to figure out how to best utilize that time in order to reach the goals that we have in life. Those may be family goals, financial goals, whatever the case may be, that’s where you’re going to spend your time.
So if you’re looking to buy a home and you need to increase your income, then you have to find ways to do that. Whether on the job or, like I said, through a side business, just receiving the cost of living increase every year from your job is not going to cut it. It’s not going to keep up with home prices. It’s not even going to keep up with grocery prices. So you have to find ways to increase your income on the job.
That might be additional training, getting additional degrees, or finding a totally different job in a different industry. You have to find ways that if you’re going to work a nine to five job, how can I increase the amount that I make per hour while I’m there? If it’s impossible for you to raise your hourly rate on the job, then you have to utilize the time that you have outside of the job in order to increase your income.
It may be starting your own business or just doing some side gigs to increase your income on a monthly basis. There are a number of challenges out there on TikTok and social media where people are finding ways to make an extra $100 a day for 100 straight days. Look up some of these challenges. Look at what they’re doing, they provide some great resources on where you can find that additional income and participate in some of those programs.
If you know me, I’m all about small business. I’m all about people starting a business based on a talent or a passion that they have, because there’s no cap on the amount of money that you can earn through your business. Your business can double every year for five years straight, nobody’s telling you how much you can make, and so I am a firm believer in the thought and the passion that goes behind small businesses here in America.
So if you have an idea for a business, launch that business. Get some insight, get some feedback from those you know and love, and see if it’s a viable business that can help you grow your income so you can buy your first home.
So the good news behind all of this is that you control your income, and your income controls your ability to buy. So increase your income. Like I say, get creative, look on social media, find ways to increase your monthly income. That way you can qualify no matter what the rates are and no matter what home prices look like.
If you need help in discovering some creative ways to earn additional income or better manage your budget, that’s what we’re here for. Reach out to us to get started with Homeowner Rrep. We can set up a consultation and help you with some planning to make more money. You can get started with homeowner prep by texting the word START to 619-848-3700 or you can visit us on our website at www.homeownerprep.com/start set up your initial consultation, and get started with a game plan on how you can increase your income.
If you just have a general question or a scenario that you want to run by us, feel free to reach out to us on social media. We’re on all social media channels and we tend to get the majority of our questions on our Instagram account @HomeownerPrep.
I hope you got some value from today’s episode, and I hope that you’re already starting to think of creative ways to increase your income so you can buy your first home. I look forward to providing you with some more great content on the next episode, and until then, be blessed.
If you’ve enjoyed this show and got some great value from it, please be sure to rate and review and if you’re checking it out on YouTube, please be sure to subscribe. That really does help us to continue the show and bring in some great guests to help you on your home buying journey.
Connect with Homeowner Prep:
Want to buy a house, but not sure how to get started? Visit our Start Page and we can help you, no matter where you’re at on your homeownership journey. If you enjoyed this episode of The Homeowner Prep Podcast, be sure to subscribe on iTunes and leave a review. It means so much to hear your feedback and we’d love for you to help us spread the word!