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  • Don Magruder

Go Back to Basics to Afford a Home


There is no arguing that home prices are expensive and since the Federal Reserve has started aggressively raising interest rates, mortgage rates have been higher since the first of the year. Let’s be honest, the artificially lower interest rate environment created by the Federal Reserve over the last few years has done a disservice in that it allowed people to buy more home than in the past with cheaper money. It has created a new standard of homebuying expectations that once were considered luxuries.


For those who have gray and white in their hair, they watch with amazement at the new homes with modern luxuries being purchased by young families. Ask most adults over the age of 55 what their first home looked like, and it was probably a lot smaller, and it was filled with the very basics in construction such as laminate countertops, vinyl floors, plain flush doors, and simple white bathroom fixtures. Most had stock light fixtures with only a couple of options, and everyone had the same stainless-steel sink. It was a starter home and the homebuyers of yesteryear understood as they became better off, some day they could upgrade the home.


A mortgage rate of less than 3 percent was unimaginable, and in fact, a good rate was anything less than 8 percent. Plus, there was no such thing as no down payment loans, you had to save or have a parent give you a 10 percent down payment just to buy the home. In short, it was just as hard buying a new home 30 and 40 years ago as it is today, but there was one big difference, first-time homebuyers understood they had to be frugal and sacrifice to buy a home.


Many middle-class homebuyers who would like a home, even today, could afford one if they had the same attitude and willingness to sacrifice as their parents and grandparents did decades ago. It is simply a matter of understanding wants and needs.

Yes, everyone wants a nice home with all the bells and whistles, but for most, all you need is a simple home with a solid foundation, four strong walls, and a good roof. Homes can always be updated and remodeled later, but in this moment, base housing expectations on what you really can afford.


If you want a home, the following are my top 8 tips for affording one:

  • Live within your means and sacrifice daily to save money for a down payment. Understand wants and needs at every level especially when it comes to technology and the monthly fees.

  • Set realistic expectations for the home amenities. There is nothing wrong with plain lights, stainless-steel sinks, white bathroom fixtures, and vinyl flooring. Lower the cost at every turn, and especially when it comes to the size of the home. Yes, most people started with a home that was only 800 to 1,000 square feet.

  • Pay down and eliminate all debt. With higher interest rates, the monthly payments on credit card debt could be used toward a house note each month. Protect your credit score by paying debt on time. Good credit was much more important to people decades ago and it needs to become important again.

  • Be frugal in all your leisure activities Decades ago, eating out was an occasional treat, not a nightly occurrence. Some people are eating themselves out of buying a house because they don’t want to prepare an inexpensive meal at home.

  • Buying the finest products used to be for those who had matured in life, not a 25-year-old just out of college. Manage your lifestyle to your paycheck.

  • Have a real family budget and work it daily. Blind spending leads to financial hardships.

  • Don’t hire someone to get things done - do it yourself if you can. Can you really afford someone who makes as much as you do to work around your home?

  • Instill in your mind how important owning a home is to you and your family, and do not prioritize other activities above that dream. A modest home is better than no home.

Here is the big takeaway. Yes, housing is expensive, and yes, interest rates are higher, but it is no different than the struggles of generations of other homebuyers. Homebuyers in the past understood how important it was to own a home, and they sacrificed and did whatever they had to do to have a home. If you want a home, you can eventually buy one, but you must be patient and be willing to take the personal actions to make it happen.

Don Magruder is the CEO of Ro-Mac Lumber & Supply, Inc., and he is also the host of the “Around the House” Show which can be seen at AroundtheHouse.TV.

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