May 8, 2024
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As mortgage rates continue to hover around the 7% mark and home prices remain high, the dream of homeownership for many Americans is looking more like a fantasy.
It’s a dire situation for would-be buyers that’s preventing them from gaining a foothold on the real estate ladder and building the kind of financial security that comes with owning property.
The median listing price for a starter home in March was $424,500, according to Realtor.com. Today’s first-time homebuyers would need an annual household income of around $81,360, assuming a 6% down payment, to afford the mortgage, which is $8,120 higher than a year ago.
In the face of soaring prices and limited availability, if you’re seeking to build wealth through real estate investments in 2024, here are some things to consider.
Alternatives to buying properties
During the Great Recession, housing prices saw a notable decline nationwide. But historically low interest rates that followed made for a very good buying opportunity. In the decade that preceded the pandemic, the value of owner-occupied housing had climbed up.
Today, prospective buyers face a number of hurdles due to inflation with persistently elevated mortgage rates and a nationwide shortage of available inventory.
But if you still want to build wealth through real estate, there are a number of options available for you.
If you want to get a slice of the rental market, you can do so with Arrived. With an investment threshold of $100, Arrived lets you purchase income-generating vacation homes and rental properties.
To get started, browse through their selection of vetted properties, picked for their potential appreciation and income generation. Once you choose a property, you can start investing,
Prime commercial real estate has outperformed the S&P 500 over a 25-year period. But commercial real estate has always been reserved for a few elite investors — until now.
First National Realty Partners allows accredited individual investors to access institutional-quality commercial real estate investments — without the leg work of finding deals yourself.
FNRP’s secure online platform makes investing in commercial real estate convenient and simple. You can engage with experts, explore available deals, and easily make an allocation in an all-in-one personalized portal.
Leveraging the real estate market
In many parts of the country, especially major cities, the dream of owning a home feels increasingly out of reach for younger generations. Renting is the norm, but saving up for a down payment while paying rent can be tricky, especially when the average cost of a one-bedroom apartment can soar into the thousands each month.
It stands to reason that those who have homes and bought them at the right time will continue to see their net worth increase. Meanwhile, people who haven’t bought will continue to fall behind — especially if they live in an expensive city.
But your wealth-building goals don’t need to be stymied. Consider investing in a residential real estate investment trust (REIT), a publicly traded company that collects rent from tenants and passes that rent to shareholders in the form of dividend payments.
Real estate investment firm DLP Capital makes it easy to access the lucrative potential of REITs.
The platform offers a variety of funds in residential and multifamily real estate with targeted annual returns of up to 13%.
If you’re looking to venture into something a little different than publicly-traded REITs, Fundrise offers an opportunity to help grow your portfolio through their exclusive eREITS.
Unlike traditional REITs, Fundrise eREITS are available exclusively through their platform.
Each eREIT is part of a distinct investment strategy encompassing a range of real estate assets, including residential and commercial properties or real estate loans to choose from.
Low minimum investments make it easy to diversify your portfolio with income-generating real estate.
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