Demand for first-time homeownership is surging as many late-blooming millennials are finally seeking to settle down. But in some ways, their timing couldn’t be worse. That’s because entry-level homes are in severely short supply, and prices are still ascending.

Indeed, as of December a stunning 94% of U.S. metros experienced year-over-year price gains, according to statistics from the National Association of Realtors (realtor.org). In some areas, these gains even reached double digits.

At Seattle-based Zillow, the real estate data firm, economist Jeff Tucker is predicting a surge in home-buying interest as the spring selling season approaches.

“Buyers are already competing over near-record-low numbers of homes for sale. That is likely to mean more multiple offer situations and that buyers will have a harder time finding the perfect fit for their families,” Tucker says.

But such predictions haven’t weakened the resolve of many wannabe owners.

Take the case of Catherine Wood, a Washington, D.C.-based life coach. Now in their early 30s, she and her partner are extremely eager to own a place of their own.

Still, this couple, like many other aspiring owners in their age group, worries about the rising costs of real estate and whether their future mortgage payments would limit their ability to reach other costly goals, like traveling abroad or starting a family.

Here are a few other pointers for prospective first-time buyers:

-- Try to avoid taking so large a mortgage that you’ll be house-poor.

Many people assume lenders are now so cautious that even creditworthy homebuyers must struggle to get as big a mortgage as they desire.

But in reality, many buyers with solid jobs and decent credit scores can still obtain a home loan so large they’re at risk of financial peril, says Keith Gumbinger, a vice president at HSH Associates (hsh.com), which tracks mortgage rates throughout the country.

One reason many buyers can qualify for too large a mortgage has to do with the way lenders evaluate applicants. Though household expenses have risen dramatically in many categories, including for health and education, lenders still rely heavily on applicants’ gross income as the main gauge of their borrowing capacity.

“Lenders don’t know how much money you have left over after you’ve met all your other obligations,” Gumbinger says.

Before taking out any mortgage that could make you house-poor, he encourages you to do a thorough inventory of both your financial priorities and expenses.

-- Take a close look at your pay stubs.

It’s not only income taxes and Social Security contributions that come out of typical paychecks. Many people also have their net pay reduced for health insurance premiums, as well as group life insurance and retirement savings contributions.

Though lenders focus primarily on your gross income, you should look closely at your net pay before deciding how much to borrow for a home, says Mark Nash, a real estate analyst and author of “1001 Tips for Buying and Selling a Home.”

“When it comes to income, what matters most is the bottom line on your pay stub, not the top one,” Nash says.

-- Consider basic expenses in your calculations.

Nash says many first-time buyers are especially vulnerable to rising commuting costs when they leave an in-town apartment to obtain a house in the suburbs.

“People who depend on a car to get to work have to allow space in their budget for an increase of 5% or more per year in the cost of commuting,” he says.

-- Leave latitude in your budget for raising children if that’s your plan.

Are you a newly married couple embarking on your first home purchase? Do you also hope to have children within the next few years?

If so, you’ll want to factor the costs of child rearing into your calculations on how large a mortgage to carry, Nash says.

“It’s amazing how many people can’t afford kids because their mortgage payments are too high. The shame of it is they didn’t think through the trade-offs before buying that big house,” he says.

As Nash notes, the cost of day care in urban areas can easily top the $600-a-week mark, causing some mortgage-strapped families to forgo their family plans.

“It’s sad to think you could give up your dreams of having a first or second child just to get a bigger house with more bells and whistles,” Nash says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

He was an IT specialist and she a nurse-practitioner. Through their 30s to 50s, this couple lived contentedly in their brick ranch in a wooded suburb with highly rated schools. But after they hit their 60s and their kids cleared college, the pair entered a period of great indecision -- as well as marital conflict -- about where to live in their later years.

As a retiree, he dreamed of relinquishing ownership of their big place with all its obligations and proposed moving to a trendy city hamlet where they could run a cozy coffee shop. But his wife, also retired, had mixed feelings about leaving their 3,000-square-foot home, which was so filled with happy family memories -- a place perfectly decorated to her taste.

It took nearly a decade for this couple to decide whether and where to move. Ultimately, they sold their handsome rancher and found a smaller loft to their liking in a semi-suburban town where they now teach yoga classes rather than run a coffee shop.

Mark Nash, a longtime real estate broker and analyst, doesn’t know the couple in this true story. But he’s not surprised that as retirees, they went through such an agonizing ordeal before charting their final housing path.

“A lot of Americans have so much of their identity tied up in their house -- and letting go is all the harder the older you get. Downsizing has plenty of benefits. But waiting too many years makes it very difficult,” Nash says.

Of course, many retirees -- including those who rely heavily on Social Security checks that currently average less than $1,500 monthly -- have limited housing options. Many in this category must either remain in a modest house they own free and clear or sell and move to an inexpensive rental unit. Still others who face significant health issues must move to assisted living.

But couples like the retired nurse and her husband, who are healthy and have ample retirement savings -- as well as substantial home equity -- have many housing choices open to them.

“Ironically, seniors who are financially secure often have so many real estate opportunities they can suffer from over-choice. This can cause great discomfort and discord in their personal lives,” says Nash, the author of “1001 Tips for Buying & Selling a Home.”

After weighing the pros and cons of scaling back their housing, an increasing number of people are now interested in smaller living, says Lauri Ward, author of “Downsizing Your Home With Style.”

“More people now want to live a calmer, simpler life. In a smaller place, you not only cut expenses but you reduce your carbon footprint. It’s like going from a big luxury car to a Prius,” Ward says.

Here are a few pointers for seniors debating between downsizing and aging in place:

-- Actualize your alternatives through in-person visits. A major factor in your decision on whether to sell your big house and downsize comes down to your comfort level with a smaller property. You can ruminate endlessly about your options, but there’s no substitute for onsite visits.

“Get out of that armchair and go see the smaller properties. Once inside, you’ll have an easier time imagining if you’d be comfortable with a more condensed lifestyle or whether you absolutely can’t part with your current house,” Nash says.

-- Make sure you and your partner are in agreement. “If you’re making a big housing move, there’s always a relationship dynamic for couples. You can’t ignore this reality,” Nash says. “You never want to pressure the other person into selling if they’re not really on board with the plan. That could backfire when resentment builds later,” he says.

-- Consider a few sessions with a life coach. Obviously, there are many financial implications to a major real estate move. And that’s all the more so now, given that homes continue to gain value in many neighborhoods.

“In any market, it can take quite a while to reverse a real estate mistake. So you don’t want to make a mistake in the first place,” Nash says.

Some people consult a financial planner or accountant before deciding to sell a long-held home. That’s fine, says Nash, but he adds, “A good life coach will help you think through the meaning of your real estate decisions for your life as a whole -- not just your financial life.”

In choosing a life coach, he recommends that seniors select someone who has reached their age or is older.

“If you’re 60, someone who’s 40 isn’t going to grasp your situation,” he says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

The constant stream of news reports on rising home prices is resulting in strong reactions from income-tight young families aspiring to homeownership. Some wannabes have moved to the sidelines, awaiting the next recession and the return of a buyer's market they hope will bring flattening or falling prices.

But housing analysts say these wait-and-see buyers might have to hold out for a long time for a market more favorable to them. Frank Nothaft, chief economist at the economic think tank CoreLogic (corelogic.com), predicts that domestic home values will continue to rise, scoring a 5.2% gain by the end of 2020. What’s more, he forecasts that this year price gains will be even steeper for entry-level properties.

Of course, not all would-be first-time owners are awaiting a buyer’s market before trying to tackle the affordability challenge. Others are dropping their standards on the type of property they select, thereby putting themselves at serious risk for a later case of buyer's remorse.

Some buyers learn the hard way. Take the case of an actor and his wife, an environmental science student. After reaching their late 30s and having their first child, the couple got serious about leaving their rental apartment for a condo they could own. They targeted a popular city neighborhood, and with financial assistance from parents closed on a three-bedroom unit with bay windows and elegant moldings throughout. They thought they got a good deal.

But the property, built in the late 1800s, is riddled with severe problems. Its plumbing and electrical systems are nearly nonfunctional, and all the appliances must be replaced. Worse, all the walls and ceilings in the condo are covered in lead paint and will need to be stripped and repainted before the couple can live there safely with their 2-year-old son.

Accepting a fixer-upper with very major problems is proving false economy for this young family, who have limited funds for professional contractors. To save money, the husband is attempting to strip the lead paint himself. This has cost him precious time, cutting income from his career work. The strain is also adding heavy stress to the couple’s marriage.

Eric Tyson, a consumer advocate and co-author of “Home Buying for Dummies,” doesn’t know the family in this true story. But he says that even in an era of rising housing prices, it can be a serious error for novice buyers to take on a property with such fundamental issues.

Here are a few other pointers for first-time buyers:

-- Consider a property that needs only cosmetic upgrades.

Although buying a fixer-upper with fundamental problems could be a major mistake for buyers, purchasing one with mere cosmetic issues might be a wise choice. Such properties have electricity, plumbing and all other systems in working order, but have become outdated in terms of the interior. Hence, they may be forced to sell at a price that’s below market value.

“Folks who’ve been in their house for 20 years or longer often settle in and forget about the aesthetics,” says Tom Early, a veteran real estate broker.

But buyers have to be certain to distinguish between an out-of-fashion house and one with deep underlying issues.

Early recommends a thorough inspection to determine whether a home has fundamental flaws, such as a deteriorating foundation. One way to find a well-trained inspector is through the American Society of Home Inspectors (homeinspector.org).

-- Focus on overpriced houses.

First-time purchasers (and even veteran homebuyers, for that matter) may overlook an important reality of real estate: You can sometimes get the best deals on homes that were priced too high in the beginning.

The trick is to be sure you’re among the first to know when the owners of a property in your neighborhood of choice decide to cut their price. Early says you should tell your agent to alert you immediately when this happens.

“Make sure your agent calls, texts or emails you within eight hours after a price cut occurs,” says Early, a past president of the National Association of Exclusive Buyer Agents (naeba.org).

-- Find sellers who are highly motivated to move.

In real estate, as in many transactions, time is money. Sellers who must move quickly, perhaps due to a marital breakup, job relocation or financial reversal, are obviously more likely to let their property go for a bargain price.

You needn’t do anything sneaky to find out more about the motivations of owners in an area where you’re searching for an affordable first home. Often, sellers convey their intentions directly through ads posted by their listing agent. Perhaps their ads will read: “Seller Motivated” or “Must Move Quickly.”

If the advertising doesn’t reveal the sellers’ motivation, a few casual inquiries placed by your agent to the listing agent could do so.

Once you grasp the sellers’ motivation -- and their timing -- you can customize your contract offer to their specific needs. It’s the flexible buyers -- who are fully pre-approved for a mortgage and can document this -- who are the most likely to command the sellers’ attention.

“After the bargaining starts, it’s the highly motivated seller who will be most responsive to your offers, as well as your counter-offers,” Early says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)