Don’t fall for real estate trends like tiny houses to become a first-time homeowner!

Housing trends come and go. A few years ago, a new craze became wildly popular – tiny houses. Defined as a structure meant to be portable and less than 600 feet, tiny houses were supposed to be a new living situation that would make housing more affordable and accessible. Documentaries and television shows popularized the trend, and social media feeds filled with images of all kinds of tiny homes, from luxurious to off-the-grid homes.

One of the reasons that tiny homes initially sounded so appealing to many prospective home buyers was that you could own a property without paying the price of a single-family home. In the last few decades, the price of a single-family home has risen dramatically. For example, in 1995, the average was around 158k. But by 2021, the average price was 461k, a dramatic increase that gives many would-be homeowners pause when considering taking on that debt level. So, to some people, a high-end tiny home with all the luxury finishes for 100k sounded a lot more appealing at first.

Despite the initial craze, the tiny home’s popularity quickly faded. Many eager homeowners realized that despite the slightly cheaper price tag than a traditional single-family home, tiny houses came with problems, like finding a spot to place your home. Many municipalities weren’t prepared for tiny homes and had rules and bylaws that made tiny homes inaccessible in their communities. Many tiny homes ended up as short-term rentals for people to experience the lifestyle without committing to living in less than 600 square feet.

Like housing trends before it, tiny houses went out of style. Even though they were designed to make housing more affordable, they didn’t work for most people. So, if tiny homes aren’t the answer, and a single-family home is still too expensive, how can you become a homeowner? Here are a few solutions.

• Buy a condo. Condos are an affordable option for many first-time homeowners. They cost less than a single-family home, require less maintenance, and you can often get communal amenities like a gym, pool, or outdoor areas. They may also be more affordable in hot markets or near urban centers where a single-family home may be out of your price range. Condos come in different types of configurations, from apartment-style to row homes. Typically, when you buy a condo, you’ll have to pay condo fees on top of your mortgage to access communal resources and maintenance.
• Buy a townhome. Townhomes are much like condos, except they are typically larger and offer more space. Depending on the unit type, you’re still sharing walls with your neighbors like in a condo, but you may have a yard or garage. One of the advantages of buying a townhome is that you may not have to join a condo association or pay condo fees. Multiple-unit townhome properties that take up the space of one or two single-family homes are becoming more popular on the market today and can be an excellent option for first-time homebuyers!
• Use an FHA loan. If a condo or townhome isn’t going to work for your needs, there are still plenty of options to help you become a homeowner, like an FHA home loan. These loans are federally insured, so they come with lower down payment options and more lenient credit requirements. With this type of loan, your dream of becoming a homeowner can be possible and affordable.

Buying your first home is a big decision with lasting consequences. Don’t fall for housing trends, like tiny homes, that come and go when people realize they aren’t a good fit for their lives. Instead, meet with your local PRMI advisor to see your financing options. With our help, you can get a good handle on your borrowing limits to find something you are comfortable with. It may be a condo to start with or an older single-family home in your price range that you buy with an FHA loan. With our help, you can find the right fit for your homeownership dreams.