Why You Shouldn’t Necessarily Take Homebuying Advice from Family and Friends

When you tell relatives or friends that you’re thinking about buying a house, some of them will probably be eager to give you advice. They might have the best of intentions, but you shouldn’t necessarily listen to everything they say.

People who bought homes in the past might tell you what they did and recommend that you do the same thing. The economy has changed, and what worked for them might not be practical or possible for you today.

The Affordability Gap Has Grown

Your parents or grandparents might advise you to buy a home as soon as possible, but they might not understand the economic reality you’re facing. Over the past few decades, home prices have risen, but wages haven’t kept pace.

In the 1990s, the median price of a house in the United States was approximately 3.2 times the median annual household income. In 2024, the median price of a house was 5 times the median annual household income.

Those figures represent nationwide averages. In some major metropolitan areas, particularly on the West and East coasts, the affordability gap is even wider.

The gap between home prices and income creates a significant hurdle for buyers, especially those who are looking for their first home. It’s hard to save enough for a down payment, and high student loan payments only add to the burden.

Family and Friends Might Give You Inaccurate Information

One of the most common misconceptions about buying a house is that you must put down 20% of the purchase price. That was required in the past, but it isn’t anymore.

The Federal Housing Administration offers mortgages with down payments as low as 3.5%, and the Department of Agriculture and Department of Veterans Affairs offer home loans with no down payment at all. Conventional mortgages with low down payments are also available.

Nevertheless, a majority of Americans still believe a 20% down payment is required. If loved ones have been insisting that you have to meet that threshold, it might be stressing you out and making you feel like you’ll never be able to buy a house.

Your Circumstances Are Unique

People often give one-size-fits-all advice and ignore the fact that everybody’s situation is different. Loved ones might assume that what worked for them will work for you but fail to consider the fact that you have a different income, you live in a different area, or you have high student loan payments. You have to make decisions based on your reality, not someone else’s.

Get Accurate and Up-to-Date Information

Buying a house is a major financial move. Family and friends might mean well, but they can lead you astray. You need reliable and unbiased information so you can figure out what’s right for you.

Financial Freedom Voyage’s First-Time Homebuyer Masterclass explains the homebuying process in detail. It covers critical subjects like how different types of mortgages work, how to estimate the total cost of ownership, and how to find a house that fits your budget. Enroll today.

Please share this blog on social media and/or send it to someone you know who is thinking about buying a house this year.