Smart Moves

At age 37, an auto mechanic has modest aspirations for a house he hopes to buy in suburban Maryland. His job will likely only allow him to finance a place below the median price in the area where his family -- his homemaker wife and two toddlers -- now rent.

But the mechanic’s quest to buy is unflagging. This is despite the fact that his savings accounts have declined due to recent stock market fluctuations. Still, he notices that many more homes are now on the market in the area where he lives. That’s due to layoffs at federal agencies in his vicinity.

“This spring seems like a time when sellers are more open to negotiation than last year, when we started home shopping for real. I see lots more price cuts by owners. They’re not as haughty as before. So we’re hopeful,” the mechanic says.

With its concentration of federal employees, Maryland is among several states where federal cutbacks are increasing unemployment. Also affected by federal job loss are parts of Virginia and California.

“There are no giveaways for houses in our area. But at least sellers are more motivated. Plus, there’s no urgency for us to move,” the mechanic says.

Chen Zhao, the head of economic research at Redfin, a national real estate brokerage, doesn’t know the mechanic in this true story. But she shares the expectation that home prices should moderate in much of Maryland. She also foresees lower mortgage rates going forward.

Still, Zhao says an increase in home shoppers hasn’t yet translated to more sales “because prospective buyers are still figuring out whether lower payments are enough to justify a home purchase in today’s uncertain economy.”

Here are a few pointers for buyers:

-- Limit yourself to your financial comfort zone.

Michael Crowley, a real estate broker and former president of the National Association of Exclusive Buyer Agents (naeba.org), cautions buyers against taking any mortgage that feels uncomfortably large.

“These days, there’s no easy way to qualify for a mortgage. Lenders aren’t easing up on their requirement for full documentation of your income, assets and credit history. Yet it’s still possible to encounter a loan officer who will let you borrow more than is prudent. You’re the one who must draw the line,” Crowley says.

However, he notes that today’s young adults are typically quite conservative about their borrowing habits. They have vivid memories of older relatives who lost their homes due to foreclosures during the Great Recession.

-- Look for a place where you could house a roommate or two.

Unlike older homebuyers -- including those who’ve formed families -- many young purchasers are comfortable with the notion of sharing their property with roommates. After all, that’s what they did in a college dorm or a rented group house.

“For homeowners of all ages, it can be advantageous to have at least one rent-paying housemate,” Crowley says.

What kind of property is most attractive to renters?

Crowley recommends you seek a home with a bedroom suite that includes a private bath so a roommate could live more autonomously. A separate, outside entrance to the suite would be ideal. Also, a place near a college campus could be an especially good bet.

-- Seek an energy-efficient home.

After becoming owners for the first time, many buyers are stunned by the size of their upkeep expenses. They find themselves making frequent trips to Home Depot to buy everything from garden supplies to light bulbs. Also, they didn’t budget for high plumbers bills or energy costs.

Of course, many costs associated with homeownership -- such as taxes and insurance -- are unavoidable. But sharp home shoppers can more easily contain their utility costs by selecting an energy-efficient property that’s well insulated and has double-pane windows.

“Despite advances in energy production, inflation is more or less a given for utility bills,” Crowley says.

Financial advisers suggest that before agreeing to buy a particular property, you review at least six months’ worth of utility bills from the current owner. Also, make sure the home inspector you hire gives you a sound estimate of your utility costs going forward.

Ask your inspector to tell you about the quality of insulation for any property you’re considering, including energy ratings for your windows. Double-pane windows can save you as much as 15% to 20% on your utility bills compared with single-pane windows.

-- Don’t forget to factor lifestyle into your home selection.

Whether you’re single or part of a growing family, your social life is doubtless important to you. Even if you outpace many of your friends in the quest for homeownership, you don’t want your move to result in social isolation.

You needn’t live in the immediate vicinity of friends to stay close. But you could find life in a faraway suburb very lonely if the neighborhood where you move to is a long drive from close friends.

“Location is terribly important when it comes to lifestyle. Choosing the right property isn’t just about lots of square footage and fancy features. It’s also about a lifestyle that’s fulfilling on multiple levels,” Crowley says.

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

A registered nurse of 37, who has long aspired to homeownership, never expected to still be renting in 2025. But that’s the reality for her and an estimated 35 million other members of the millennial generation who feel stuck in their rental units.

“As an intensive-care specialist, I make a good salary. I’ve worked long hours since college. It doesn’t seem fair that I’ve fallen short on homeownership,” the nurse says.

Those who track housing trends aren’t surprised that the nurse -- like nearly half of those in her large population cohort -- is still struggling to buy. Compared to the baby boomers, millennials, born between 1981 and 1996, have faced a succession of financial challenges.

Many carry large amounts of student debt, which inhibits their buying power. High inflation in housing costs and a shortage of available properties in popular metro areas also hinder their search.

Economists point to multiple factors holding back wannabe owners from the millennial age group. They came of age during the financial crisis of 2008, and many had their plans again disrupted by the pandemic that hit in 2020. During COVID-19, rising home prices combined with bidding wars, and higher mortgage rates made it harder than ever to buy.

Still, millennial wannabe homeowners aren’t giving up. Though wary, many are trying again this year, despite ongoing economic uncertainties.

“Of late, it feels increasingly difficult to discern what may lie ahead,” says Keith Gumbinger, a vice president at HSH Associates, which tracks mortgage markets across the country.

One step that wannabe owners are taking involves intensifying their savings in any way possible, says Ashley Richardson, who’s affiliated with the Council of Residential Specialists.

Contrary to widespread belief, these days, first-time buyers don’t need a 15% to 20% down to finance a home. Though mortgage lending standards remain stringent, low down payment options are widely available. Still, nearly all purchasers need cash -- if only for closing costs and moving expenses.

“As always, cash talks. People with more cash can get better deals,” Richardson says.

Here are a few pointers for buyers:

-- Reflect on your attitudes about spending.

What stops people from reducing their spending? Financial planners say emotional impediments are often to blame.

Shawn Koch, a certified financial planner who counts many millennials among her clients, says that numerous people attempting a crash savings program first need to deal with the reasons for their poor money habits. To help conquer these impediments, she recommends a book called “Money Harmony: A Roadmap for Individuals and Couples,” by Olivia Mellan.

“To get in hunker-down mode, you may need an attitude adjustment,” Koch says.

-- Start with an inventory of your current spending.

A major obstacle to saving for a home is uncontrolled day-to-day spending. But before you can decide how to reallocate your funds, Koch says you need to review where your money has gone for a period of several months. This can be done either with pen and paper or a personal finance tool such as Quicken.

Such a review can bring surprises. Koch says many of her clients are shocked to learn how much they’re spending on restaurant meals, carryout food, delivery orders and coffee breaks.

Doing a spending inventory can be time-consuming because you must sift through credit card and checking account statements. Indeed, for those who don’t routinely track their spending, this process could take the better part of a weekend. But Koch says it’s essential to determine where cuts are possible.

-- Set up a budget that allows room for your savings goal.

Given the ever-rising cost of living, Koch says it’s hard to trim expenses enough to allow for a serious savings program. Still, she urges savers to examine their largest outlays, including regular supermarket spending.

“People know restaurants are costly. But grocery store food can also add up fast,” says Koch, who recommends that clients buy fewer processed foods, do more home cooking, monitor food waste closely and consider taking bag lunches to work.

Transportation costs can also put a big dent in most household budgets. Koch advises savers to challenge long-held assumptions about car ownership. Would public transit or carpooling be a realistic alternative for commuting that could lead to hefty savings, including for car insurance?

“To save for a house, you may need to cut a car,” Koch says.

Koch also recommends you examine your cellphone outlays.

“Do you really need the latest iPhone, or will the phone you’ve owned for a couple of years still meet your needs? You can always upgrade to a better phone after you’ve met your other money goals,” Koch says.

Creating a working budget that saves expenses isn’t a tough thing to do. But for those who need guidance, Koch recommends “The Budget Kit: The Common Cents Money Management Workbook,” by Judy Lawrence.

-- Establish an automatic savings plan.

Many people living paycheck-to-paycheck find it hard to summon the discipline to save significant amounts of money. And they fear automatic withdrawals from their pay.

But financial planners say automatic withdrawals can be the answer for people who aren’t methodical savers. And they say those who have direct debits taken from their pay rarely miss the money. Meanwhile, their savings accounts add up quickly.

With an automatic debit plan, you just set it and forget it. That’s a big plus for anyone trying to save money for a house,” Koch says.

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

A semi-retired doctor in his early 60s relishes his architect-designed contemporary house surrounded by splendid gardens and water features.

Yet despite his devotion to the property, the doctor has decided to sell -- and for a happy reason. Come this June, he will remarry and move in with his new wife, in her neo-Georgian in another city. That means he must clear out his current property to ready it for showings.

“I never imagined leaving my private castle. This was supposed to be my forever house. But here I am, needing to let go of my serene sanctuary for the next chapter of my life. And I have to do it on a short timetable, ahead of my wedding,” he says.

Mark Nash, a longtime real estate analyst and broker, doesn’t know the doctor in this true story. But he says the man’s brief timetable should work to his advantage as he faces the considerable challenges of clearing through decades’ worth of possessions.

“Many older homeowners spend months and years sifting through their belongings. Retirees especially may focus on these decluttering tasks endlessly. But they gain little momentum until they face a deadline,” Nash says.

The doctor is a case in point. His living room is jam-packed with CDs and DVDs, along with seemingly countless framed photos of his grown children and now toddler-aged grandchildren. There are also lots of pictures of his two cherished cats and a long-deceased terrier.

Meanwhile, the doctor’s kitchen cabinets are overfilled with dishware, some of it inherited heirlooms. His pantry has more such collections, along with an abundance of canned delicacies and bottles of liquor collected from trips abroad. Yet the most challenging task he faces involves the need to purge the excess from his home office.

“For retiring professionals and remote workers, books, papers and documents represent a formidable and time-consuming challenge, because they must be dealt with one-by-one and can’t be discarded wholesale,” Nash says.

Professional organizers, such as Susan Pinksy, author of “The Fast and Furious 5 Step Organizing Solution,” say many sellers who operate a home-based business find the chore of decluttering especially intimidating.

“They have to figure out how to keep the company running while the house is on the market, which is extremely hard,” Pinsky says.

Why is it so tough to keep a home office looking neat?

Pinksy, who’s long worked with both business and residential clients, points to a paradox. At a time when vast quantities of information are available instantly via the internet, many people still save more papers, magazines and books than they need. They also hang on to lots of old technology -- including office equipment no longer in use.

Are you a wannabe seller with an urgent need to clear your home office? If so, these pointers could prove helpful:

-- Uplift paper culling to a priority.

Many people who have home offices are plagued with boxes and bags filled with unsorted papers. These include business reports, computer printouts, junk mail, utility bills, credit card statements and clippings from magazines and newspapers.

Very few of the papers that people keep have value to their business ventures or careers, says Pierrette Ashcroft, a productivity consultant who operates her own home-based business.

“More than 80% of the papers people save are never referred to again,” she says.

The problem for sellers is that any kind of clutter, including papers, makes a home look untidy. That can cause visitors to conclude the house has more problems than meet the eye, says Nash, author of “1001 Tips for Buying & Selling a Home.”

“Less is always more when it comes to selling your home,” Nash says.

Unfortunately, it can take more time and energy to go through papers than just about any other kind of clutter.

“You can’t just throw it all out because that box filled with junk mail might also hold your passport or the deed to your house,” he says.

-- Consider a scanner to help store papers electronically, rather than filing cabinets.

Many people who maintain home offices attempt to stay organized via extensive filing systems. But Ashcroft says that filing all but the most important papers is usually a waste of time and energy.

She urges those trying to declutter a home office to scan many of their documents into their computer rather than trying to store them in filing cabinets.

-- Dramatically reduce the size of your book collections.

Many people from all types of professional backgrounds keep bigger libraries than they ever need or use for reference.

“People have an emotional attachment to books,” Ashcroft says, noting that overflowing bookshelves are often found throughout a home, not only in the home office.

The problem for bibliophiles preparing to sell their home is that shelves crammed with books make a property seem smaller than it truly is. What’s more, it can be costly to pay a moving company to transport your books --especially if you’re making a long-distance move.

Ashcroft says sellers with substantial book collections are wise to clear through them before their property goes on the market -- dispensing with any books they no longer use. Remember, too, that many books can now be quickly and easily accessed from an e-reader, such as the Kindle sold by Amazon.

“You don’t have to cling to conventional books to keep many volumes you value. Let technology spare you,” she says.

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