Since graduating college in May, I’ve been thinking about my future a lot. One question has stood out: Am I going to be able to buy a home like my parents did less than 30 years ago?

Pretty much everywhere, home prices have climbed in recent years. The median price for metro Atlanta, which spans multiple counties, grew from $190,634 in April 2015 to $393,333 in April of this year, according to the Federal Reserve Bank of Atlanta.

Atlanta isn’t the worst place to be looking. But rising prices and interest rates have created a nasty combo. Recently, Motley Fool Money ranked Atlanta the ninth most affordable major U.S. city, but it’s important to put that in context.

Based on a calculation to afford the median home price with a 10% down payment, metro Atlanta households would be expected to spend $3,018 on their homes per month, according to the Atlanta Fed. For this to be affordable by the U.S. Department of Housing and Urban Development’s standard — annual costs being no more than 30% of annual household income — local families need to make at least $120,720. The median metro household income was $89,803 in April, according to the Atlanta Fed — only about 74% of what’s needed.

Metro Atlantans spend about 40% of their income on homeownership, compared to the national average of 46%, according to the Atlanta Fed.

Atlanta may not be considered super affordable right now, but we’re better off than many Americans.

An example closer to home

My parents bought their first house, near Kennesaw Mountain, in 1998. They got the brand-new four-bedroom, three-bath house for $143,300, or about $285,000 in today’s dollars. They got a loan to get to 20% for a down payment, in addition to their mortgage. At the time, my mom was 24, only a year out of college and two years older than I am now.

We bought our current four-bedroom, 2.5-bath house, also in Marietta, in 2005 for $255,000, or about $430,000 in today’s money. Now, Zillow estimates our house is worth $566,800 — more than double what my parents paid, not counting inflation. Same for the first house.

Talking to people on the ground

I’m not actually in the market right now. So, I talked to people who could tell me what it’s like in the trenches.

Ashley Goodrich, a real estate agent with Keller Williams who focuses largely on the East Cobb/Roswell area, confirmed what the data says: prices are up and income hasn’t kept up.

Thao Le, an assistant professor at Georgia State University’s Robinson College of Business, gave me insight on how we actually got here: supply problems.

Home prices have risen way faster than income, which fuels the affordability gap. But why have prices risen so much so fast?

We aren’t building enough housing, especially affordable housing — partly because affordable housing is less profitable for developers, Le explained, and partly because of various government regulations. Atlanta doesn’t suffer from the latter as much, Le said.

But it’s not just affordable housing in short supply. In a recent paper, Le found many areas never fully recovered from the Great Recession in the amount of housing built.

To round out my understanding, I wanted to talk to someone my age who’s actually gone through the home-buying process. So, I spoke to 20-year-old Braxton Broady, a Morehouse student who closed on his first home in January after saving up money from working as a waiter, various internships and scholarships and housing stipends.

Broady approached the process “by the book,” he said, to make sure everything was in order. Having someone who’d been through the process before — his parents — to guide him was a huge help.

Broady encourages first-time buyers to not skip on certain steps of the process just to save a few bucks. Getting a proper inspection can catch issues that could cost thousands to repair later. Plus, the appraisal he got enabled Broady to negotiate the price down from what the sellers were seeking.

Another key strategy Broady advises is to conservatively budget. He limited himself to $100,000 less than what he got pre-approved for; having that extra money allowed him to remove some hazardous trees and not go over budget.

Making it affordable

There are ways to make buying a home more doable.

Of course, one method is to build more, smaller housing. During a recent housing webinar by analysis firm MarketNsight, chief analyst John Hunt said we need to stop building such a large proportion of single-family detached homes, an issue partly caused by zoning based on decades-old demographics.

According to Hunt, the biggest groups in the market right now are first-time buyers and retirees — groups who generally don’t have kids or need as much space. But since 2019, Atlanta has seen average square footage, price per square foot and total price all increase.

Hunt echoed Le: there’s a shortage, and what we do have doesn’t meet the needs of people in the market. But, we can meet demand by building townhomes, duplexes and the like. Even maintaining price per square foot, cutting down size will return things to affordability, according to Hunt.

OK, but what can individual buyers do?

Consider mortgage options: LendingTree‘s chief consumer finance analyst Matt Schulz says to shop around for the best mortgage rate. This can save Georgians an average $81,299 over a 30-year mortgage ($222 per month). Georgia’s average mortgage interest rates range from 6.82% and 7.88%, so shopping around could save you more than a full percentage point.

“Doing something like that is maybe even more important now because it is something you can control in a time in which a lot of things seem completely out of our control,” Schulz said.

There’s also an assumable mortgage. Basically, you take on the seller’s existing mortgage — including the remaining balance, loan term, monthly payment and interest rate — and thus could get rates lower than you’ll find in Atlanta today. But, this can bring its own challenges — including a high down payment.

You could get an adjustable-rate mortgage, especially if you’re not looking at your forever home. ARMs start at a lower initial rate than fixed rate mortgages. Granted, depending on how long you stick around for and how interest rates change during that time, there is risk potential.

Seek assistance: There are state and city-level programs to assist with down payments, especially for affordable housing in Atlanta.

One option is a Federal Housing Administration loan, which has a set range and is especially good for helping first-time buyers, Goodrich said. FHA loans can bring your down payment to as low as 3.5%. They are also attainable if you have a lower credit score, according to Schulz.

Be realistic: I heard this from everyone I spoke to. Differentiate between wants and needs, both Goodrich and Schulz noted; know what you can sacrifice, especially if this won’t be your forever home.

“Be willing to compromise,” Broady said. “Once a house fits all your needs ... you can make it to what you want.”

Le said to consider true cost — not just the mortgage, but property taxes, maintenance, monthly bills. Schulz advised checking “how much house you can afford,” using online calculators offered by LendingTree and other services. Just because a lender says they’d give you a certain amount of money doesn’t automatically make it wise to actually borrow that much.

Finally, temper your expectations. Schulz recommends anyone in the market in coming months should save with the assumption that prices and interest rates will stay high.

So, what’s the answer?

In the Atlanta area, we’ll hopefully start seeing the affordability gap shrink.

“I’m seeing house prices have slowed down a lot,” Le said. “So hopefully it will be good news for first-time homebuyers.”

There’s no one answer for everyone. Nobody can perfectly predict what’s next for the housing market. As Schulz phrased it, “there’s so much uncertainty in the economy for about a thousand reasons.”

Still, after it all, I don’t feel as much dread as I expected.

“There are ways you can accomplish it ... doesn’t mean it’s going to be easy,” Schulz said.

Is the market great right now? No. Could it be worse? Definitely. Is buying a home possible for people my age? Technically yes. Do I think I can do it? Yeah, it’ll just take me a little longer to get there.

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