Thinking of buying a home in today’s economy?
Bruce Helmer and Peg Webb are financial advisers at Wealth Enhancement Group and co-hosts of “Your Money” on WCCO 830 AM on Sunday mornings. Email Bruce and Peg at yourmoney@wealthenhancement.com. Advisory services offered through Wealth Enhancement Advisory Services LLC, a registered investment adviser and affiliate of Wealth Enhancement Group.
For many families, buying a home remains one of life’s biggest milestones. Homeownership can provide stability, create a sense of community, and over time often becomes an important source of wealth. There’s something meaningful about having a place that’s truly your own.
With that being said, buying a home in 2026 looks different than it did just a few years ago. Today’s buyers are navigating a world of higher mortgage rates, rising insurance costs, increased property expenses and changing family needs. While the dream of homeownership remains strong, the financial playbook may need an update.
The good news? Owning a home can still make sense. The key is making sure the purchase supports your broader financial life, not the other way around.
Don’t wait for ‘perfect’
Many prospective buyers remain stuck on mortgage rates. After years of historically low borrowing costs, today’s rates can feel high by comparison. But perspective matters. The average 30-year fixed mortgage rate recently stood at approximately 6.48%, while the long-term historical average since the early 1970s has been closer to 7.7%.
The unusually low mortgage environment of a few years ago may have been a once-in-a-generation event rather than the norm. Mortgage rates hit an all-time low of 2.65% in 2021, but they reached nearly 19% in the early 1980s.
Rates matter, of course, but life doesn’t pause while waiting for ideal conditions. People continue to marry, change careers, relocate, start families and enter retirement. Buying decisions are often better driven by personal readiness than attempts to perfectly time markets.
As we often say: You may be able to refinance a mortgage someday. You can’t refinance years spent putting life on hold.
The mortgage payment isn’t the whole story
Historically, buyers focused heavily on one question: “How much house can I afford?”
But the monthly payment is only part of the calculus. Property taxes, insurance, maintenance, utility bills, repairs, homeowner association fees, landscaping and furnishing costs all affect long-term affordability. HOA fees alone have risen significantly in recent years, driven partly by higher insurance costs, stricter building standards and rising labor expenses.
Many homeowners eventually discover that ownership isn’t just a payment — it’s an ongoing lifestyle cost structure.
Affordability matters
Mortgage preapproval can be helpful, but lenders fill a different need than financial plans do.
A bank may tell you what you can borrow. Your financial plan should help determine what you should borrow. They’re not always the same number. Many households qualify for substantially more than they may comfortably want to spend. A larger house payment can affect retirement savings, travel goals, charitable giving, helping children, business aspirations or simply maintaining flexibility in your life.
For a host of reasons, many households are considering renting over owning in today’s economy, citing supply, cost and lifestyle flexibility as primary reasons. Although owning a home was considered a foundational pillar to wealth creation, renting has some clear benefits for many people.
Above all, buying a home shouldn’t require sacrificing every other financial priority. The right home purchase leaves room for the life you want to live after move-in day.
Think beyond today’s needs
Homeownership patterns are changing. For decades, many buyers followed a familiar progression: starter home, move-up home, retirement home. But today, many people are trying to solve for a much longer list of future needs all at once. Buyers increasingly consider whether a home has space for remote work, aging parents, adult children who may return home, accessibility features, rental possibilities or simply the flexibility to adapt as life changes.
In other words, buyers are asking not just, “Will this work today?” but “Will this still work 10 or 15 years from now?” Thinking longer term can help families avoid costly moves and create a home that evolves with changing priorities.
Consider the opportunity cost
A home may become your largest asset, but it probably shouldn’t become your only strategy for building wealth. Large down payments and bigger purchases create tradeoffs. Using a substantial portion of your savings for a home may reduce investment opportunities, delay retirement goals or create unnecessary financial stress if cash reserves become too thin. At the same time, housing decisions are rarely purely mathematical. They involve emotions, family expectations, lifestyle aspirations and sometimes a little fear of missing out.
Home purchases are often matters of the head and heart (and usually both). That’s why you need to think carefully about one final question: Does this home fit your plan, or are outside pressures making the decision for you? Homeownership remains one of the most rewarding decisions many families will make. The goal should be making sure your home supports the life you’re trying to build.
The original article was published in the Pioneer Press.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
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