In apartments everywhere, young renters are afflicted with a common anxiety: Whether they'll ever get off the rental treadmill to buy a home of their own.
Rising home prices, sizable student loan payments and sluggish improvements in pay combine to make it extremely tough for many young adults to break into ownership. Add to that the reality that rents are high in many communities, making it hard to amass the savings necessary for closing costs and moving expenses.
To make matters worse, the "starter home" segment of the real estate market -- the bottom 25 percent -- now has the fewest available properties, according to Sid Davis, a real estate broker and author of "A Survival Guide For Buying a Home."
Jim Blankenship, a veteran financial planner who's advised numerous young clients on their real estate plans, says, "To afford a home and qualify for a mortgage, sacrifice is often necessary."
Here are a few pointers for first-time buyers:
-- Seek to reduce your debts with extra income.
According to the latest Federal Reserve statistics, overall consumer debt, including car loans, is now relatively stable. But student loan debt continues to soar and now approaches $1 trillion.
For anyone seeking to progress financially, cutting debt -- including credit card balances -- is an absolute must.
"The interest rates charged on most credit cards are ridiculously high. All that interest can eat you alive," Blankenship says.
Unfortunately, many 20-somethings make only enough money to meet necessary living expenses. They're very limited in their capacity to pay off debt or generate savings for a down payment. Given this reality, Blankenship recommends that would-be buyers consider augmenting their income.
"Think about taking a second job. Or try to get overtime at your regular job, assuming overtime is available," he says.
-- Conserve funds by limiting your wedding costs.
Kristin Meador, a real estate broker who often works with young buyers, wrote a book designed to help clients save substantial amounts on their wedding costs, "How to Have a Wedding Without Spending a Dime: Or at Least Very Little."
The book grew out of money-saving strategies Meador developed while helping relatives and friends stage their weddings. It provides pointers on how to cut costs for a range of wedding-related expenses, from invitations to rings to the reception and honeymoon.
"When you're trying to save for a house, it makes no sense to spend $500 or more for a wedding dress," Meador says.
Her book itemizes a number of ways to hold an inexpensive yet tasteful wedding, including having the reception at a lovely local park or community center rather than a swank hotel.
The expense of an average wedding is now hovering around $26,600 -- funds Meador believes would be better spent on a home, assuming the property is carefully selected.
"A lot of parents with money to help their grown kids would rather their funds go toward a home than a fancy wedding," Meador says.
-- Try to slash your discretionary expenses.
Most young adults who live in rental units are very sensitive to their monthly housing costs. But they're typically less aware of how much money they're spending to eat out at restaurants, Blankenship says.
People in their 20s may also spend what he calls "shocking sums" on clothes, as well as entertainment. He recommends that would-be homebuyers comb through a recent month's worth of spending to realize where they could cut back.
-- Consider selling a car to plump up your savings account.
A new or nearly new car is often the first major purchase for many young adults. And usually the car is financed with a hefty loan. But mortgage lenders often frown at the sight of a prospective homebuyer driving up in a late-model vehicle.
"Lenders know that a couple who's financing one or more cars will likely find it tougher to qualify for a home loan," Blankenship says.
Even if you drive an older vehicle and have no car loan, chances are you're paying a substantial amount for car insurance and repairs, not to mention gas.
Blankenship says it's a wise idea for young couples bent on homeownership to ponder the idea of selling one vehicle. Consider public transportation or carpooling as an alternative to commuting alone.
-- Consider the possibility of shared housing on a temporary basis.
Moving in with a family member for a year or so could help you cut rental costs substantially. Perhaps an elderly relative with a large house would let you live there rent free in exchange for help with grocery shopping and trips to the doctor.
Davis says he's worked with a number of young buyers who've obtained substantial savings through a housing-for-services swap.
"You don't have to live with your aunt or another elderly person forever. Just doing so temporarily could help you save sufficiently to pay down enough debt to qualify for a mortgage," he says.
(To contact Ellen James Martin, email her at email@example.com.)