Now adults, leaders in the workplace, and parents, they’re struggling to weather economic challenges. They’re simultaneously trying to save for their children’s college while still owing student debt of their own. As their parents become elderly, they’re faced with potentially financing their care — all while trying to navigate the rising cost of housing and basic essentials.

For these reasons, it’s no surprise that millennials are experiencing a debt crisis. To learn more about millennial debt, the real estate education platform Real Estate Witch recently released a new study titled, "Millennial Debt Crisis: 90% of Millennials Are in Debt."

Here are 12 of the most important findings from the study that shed light on how millennials are dealing with crushing debt.

1. It’s not just mortgages

One might assume millennials are in debt because they borrowed money for a house, but Real Estate Witch found that a whopping 90% of millennials have non-mortgage debt. This means their debt consists of student loans, credit cards, personal loans, and more. Debt payments combined with the pressures of work, family, and other obligations contribute to overall financial instability.

2. Over half of millennials have credit card debt

Credit card debt is pervasive among millennials. Over half of them (57%) carry credit card debt, and the average balance is just under $8,500, up from about $5,300 in 2022. The findings indicate that the rising cost of living has millennials relying more on their cards to afford essentials and discretionary purchases.

3. Student loan balances are still high

Even though many millennials have been out of school for several years, 25% of them still owe money toward student loans. The average student loan balance for millennials is $56,538. This student loan burden has domino effects, making it difficult for millennials to meet other financial goals, such as saving for retirement, buying the house they want, and sending their own children to college debt-free.

4. Millennials love going out to eat

Perhaps it’s the fast pace of life and multitude of responsibilities that explain why 59% of millennials eat out at least once a week. Almost half (46%) buy alcoholic drinks at least once a week, too.

This is one category that millennials can focus on to free up cash and pay down debt. Buying a cup of coffee from a cafe every once in a while shouldn’t put consumers in debt, but a habit of impulse spending and purchases in several categories can.

5. Over one-third of millennials feel they’re at risk of bankruptcy

The Real Estate Witch data shows more than 36% of millennials feel they are at risk of bankruptcy because of their debt. This is alarming because bankruptcy can stay on a consumer’s credit report for seven or more years, making it difficult for them to achieve other financial goals, like buying a home.

Additionally, federal student loans cannot be discharged in bankruptcy except in rare circumstances, so if a consumer with multiple types of debt files for bankruptcy, they won’t be able to eliminate their student loan debt obligations.

6. Unexpected emergencies contributed to the crisis

Sometimes, major life events can derail your finances, especially if you don’t have a large emergency fund. Excessive medical costs are the biggest culprit when it comes to life events putting people in debt. Around 42% of millennials say a medical issue contributed to them going into debt, and 31% say a job loss contributed to them going into debt

7. Living paycheck to paycheck is common

Real Estate Witch's data shows 70% of millennials live paycheck to paycheck, including 74% of millennial women. This leaves little room for unexpected financial emergencies — or for budgeting for long-term financial goals. It also creates significant stress, especially in addition to family and work obligations.

8. Almost 100% of millennials have financial regrets

A staggering 96% of millennials have at least some regrets about their finances. The most common regret, cited by 51% of millennials, is wishing they had saved more of their income. Some other regrets include not investing their money sooner (32%), buying a home (13%), and having children (11%).

9. Day-to-day spending is a struggle

Everyone needs food, housing, and the ability to afford basic bills, such as water and electricity. However, the data shows over half of U.S. millennials (56%) struggle to afford bills, and almost half (47%) struggle to afford housing.

Although millennials do have financial regrets, which shows some ownership over their money dilemmas, they’re also facing an unusually harsh economy, which makes it more difficult to overcome existing financial hardships.

10. Women are disproportionately affected by the debt crisis

Millennial women are more negatively affected by the debt crisis than men. For example, almost half of millennial women (49%) can’t afford a $500 emergency out of pocket, compared to 37% of men.

The study also found millennial women have lower salaries and savings than their male counterparts, trailing men by about $15,000 in each category. Half of millennial women (50%) feel hopeless about their financial situation, compared to 43% of millennial men.

11. Millennials' income falls short of what they say they need

Millennials say they need about $120,000 to live comfortably, but the average millennial earns just under $75,000. That means millennials are only making about 63% of what they need to lead the lifestyle they want. Overspending to try to achieve that standard of living also contributes to high debt balances, particularly high credit card debt.

12. Millennials feel it’s impossible to live without debt

Many millennials feel they have to earn a college degree to achieve a desirable salary down the line. They also know that acquiring that degree often comes with tens of thousands of dollars worth of student debt. That may explain why 53% of millennials say it’s impossible to live debt-free.

Where do millennials go from here?

There’s no doubt millennials are in the midst of a debt crisis. It’s a complex challenge, derived from a mixture of stagnant wages, heavy student loan burdens, and the trappings of daily life — namely, raising children, affording rent, buying homes, and caring for parents who are getting older.

The findings above indicate extreme debt is not only a personal problem, but a societal one — an issue that requires solutions from policymakers, banks, educators, and millennials themselves.

This article originally appeared on Semya-Moya.

The post 12 Things to Know About the Millennial Debt Crisis appeared first on Semya-Moya.

So before you start shopping for your dream home, it pays to educate yourself about the mistakes that first-time home buyers can make.

From little-known advice on home financing to tips for scoping out your future neighborhood, here are 26 things people really wish they'd known before buying. These tips could save you major headaches down the road.

1. You don't actually need 20% for a down payment

Many people think they’ll need a 20% down payment. However, the reality is that 44% of buyers put down less than that, according to an April report from the National Association of Realtors.

Many programs can help first-time home buyers with their down payment, and many lenders offer mortgages with less than 20% down.

However, there are trade-offs with a lower down payment. For example, you will likely pay a higher interest rate. And you'll probably have to buy private mortgage insurance, which Freddie Mac estimates can run from $30 to $70 per month for every $100,000 borrowed. However, for many people, these trade-offs are worth it to achieve the dream of owning a home.

>> GET A FULL-SERVICE AGENT AT A 1.5% COMMISSION. Get personalized agent matches today from Semya-Moya with no obligation.

2. The bank might pre-approve you for more than you can afford

The bank's pre-approval process uses several factors, including your gross income, employment history, credit score, and debt-to-income ratio. While these are all important factors in determining your ability to repay a loan, they give only part of the picture.

The bank doesn't know your other financial obligations, such as childcare expenses, taking care of elderly parents, or extracurricular activities. They might not know how much of your paycheck goes to your retirement accounts or health insurance before your net income hits your bank account.

As a result, it's possible to be pre-approved for a loan you can't afford. That's why it's important to be honest with yourself about your budget before you start home shopping. Run the numbers to get a more accurate picture of the housing expenses you can actually cover.

3. Try different lenders — make them compete for your business

One of the best things you can do for your home-buying budget is to make multiple lenders compete for your loan. Call one and get a loan estimate, then call a few more and see if they can beat it.

Michael Quan, founder of Financially Alert, advises, "You can shop your loan to different banks and compare the APR, not just the interest rate." Not only that, he said, "You may even negotiate origination fees, rate buydowns, and other closing costs."

"Taking the time to learn more about the financing process can literally save you many tens of thousands of dollars over the course of a mortgage," explains Quan. "Don’t just blindly accept what a bank offers you on the first pass."

>>THINKING ABOUT BUYING? Compare the best mortgages

4. You’re responsible for more expenses than the down payment

Zinnia Adams, founder of Perspectives, says homeowners tend to focus on the pre-approval process without realizing other expenses will come up during the home-buying process.

Some of these costs include:

• Earnest money deposit: 1-3% of the purchase price (which later applies to your down payment or closing costs)
• Home inspections: $250-700
• Appraisal $250-500
• Closing costs: 2-5% of purchase price
• Down payment: 3.5-20% of purchase price
• Moving expenses: $1,250-$5,000

Adams cautions that some people will need more than a general home inspection. For example, depending on the house and the area, you might also request a mold or septic tank inspection — and these fees vary by location. Therefore, homeowners should be prepared not only with a down payment but also with significant cash for these expenses and closing costs.

5. Many types of mortgages are available

Different types of mortgages are available, each with its terms and conditions. The most common type of mortgage is a fixed-rate mortgage, which offers a set interest rate for the life of the loan. Adjustable-rate mortgages (ARMs) also exist, which offer an initial interest rate that is lower than that of a fixed-rate mortgage but can fluctuate over time based on market conditions. There are also government-backed mortgages, such as those offered by the Federal Housing Administration (FHA), which can help those with less-than-perfect credit to qualify for a loan.

With so many options available, it's important to do your research and speak with a qualified mortgage lender before deciding.

6. Know if you're a DIY person or not

Home improvement is tedious work. When something goes wrong, it can quickly drain your budget and even strain your relationships. When it comes to house projects, it's important to know your limitations. Many people like the idea of tackling a project themselves to save money or enjoy the satisfaction of a job well done. However, not everyone has the skills, knowledge, or follow-through to complete a project successfully.

Before buying a house that needs love and embarking on a do-it-yourself adventure, ask yourself the following questions:

• Am I reasonably handy?
• Do I have the ability to learn new skills?
• Do I have the time to dedicate to this project?
• Do I finish the projects I start?

Knowing the answers to these questions will help you determine if you should buy a fixer-upper or focus your home search on something move-in ready.

7. Find out how energy-efficient the house is

Andrew Daniels, co-founder of Millennial Homeowner, explains, "When looking for a new home, it is important to consider the energy efficiency of the property and whether or not you can afford to heat and cool it properly each month."

Although many factors contribute to a home's energy efficiency, two of the most important are the insulation and the windows. Insulation helps to keep heat in during the winter and out during the summer, while windows can let in heat from the sun or lose heat through drafts.

If a home is not properly insulated or has poor-quality windows, the cost of heating and cooling the property will be higher than that of a more energy-efficient home. It is important to consider energy efficiency when choosing a new home. Not only will it save money in the long run, but it will also help to protect the environment by reducing energy consumption.

8. Research property taxes and homeowners insurance

When you purchase a home, you will be responsible for paying two ongoing expenses: property taxes and homeowners insurance. The amount you pay for each will depend on various factors, including the value of your home, the local tax rate, and the coverage level you choose for your insurance policy.

Generally, you can expect to pay several thousand dollars each year for these expenses. While this may seem like a significant sum, it is important to remember that property taxes and homeowners insurance help to protect your most valuable asset — your home. As such, they are essential expenses that every homeowner needs to budget for.

9. A home costs more than just the monthly mortgage

When deciding whether or not to keep renting or buy, many people only compare their monthly rent to a potential monthly mortgage payment. However, Eric Nisall, an accountant and founder of Understand Finances, explains, "There are a ton more expenses that you will encounter when owning a home."

For example, he says to consider "multiple insurances" from windstorm to flood insurance to business insurance (if you run a business from home.) Then there are property taxes, potential HOA fees, utilities, and even furniture. For these reasons, those interested in homeownership should consider a fuller budget picture than just the mortgage payment.

10. Some people may spend more than 30% of their income on housing

You’ll often read the advice not to spend more than 25-30% of your monthly income on a mortgage payment. However, depending on your personal finances, the amount of debt you have, and where you live, it might make sense to bend this rule.

John Pham, founder of The Money Ninja, explains, "A person with no debt can easily handle housing costs higher than 30% of their gross income. However, someone with significant debt may find that housing expense ratio difficult to manage."

Unfortunately, many people with higher incomes take on mortgages that are not realistic due to their equally high monthly expenses and debt payments. "That’s why it’s extremely important to calculate what you can comfortably allocate to a mortgage before committing to buying a house," Pham explains.

11. Appliances break, and it's a huge bummer

"When you make a home purchase with appliances included, give yourself a conservative timetable for when you think these appliances will need replacing," says CPA Riley Adams. "In my experience," he adds, "a big-ticket expense inevitably falls to you sooner than you'd like."

>>TIRED OF COSTLY APPLIANCE REPAIRS? Check out these top home warranty companies today

12. A home maintenance account can save you

A home maintenance savings account is a great way to save money and keep your home in good repair. By setting aside a fixed amount of money each month, you can build up a fund that can be used for unexpected repairs or maintenance projects. "Having a healthy emergency fund prior to purchasing your home will ensure you can handle any expenses that come your way," says Kristin Stones, founder of Cents and Purpose.

A home maintenance savings account allows you to budget for larger projects, such as painting the house or replacing the roof. Perhaps most important, a maintenance fund can give you peace of mind, knowing that you are prepared for whatever comes your way.

13. Check if there's enough storage space

When most people are looking for a new home, they tend to focus on factors like the number of bedrooms and bathrooms, the size of the yard, and the location. However, one often-overlooked factor is storage space.

A home with plenty of storage space can be a lifesaver, especially if you have a lot of belongings. But, even if you don't have a lot of stuff, it's still nice to have somewhere to put things like holiday decorations, out-of-season clothes, and extra household supplies.

It can be easy to convince yourself you don’t actually need big closets or a large garage, but most people benefit from having a place to store their belongings neatly.

14. There won’t ever be a perfect house

You may have visions of the perfect house, down to the color of the kitchen cabinets you want. However, personal finance blogger Jackie Beck says, "If you hunt for perfection and only put in an offer on your dream home, chances are you will overpay or lose the house to a better offer." This is especially true in a seller’s market, she explains.

Instead, be willing to be flexible. This is one way you can pay under asking, even in red-hot markets. You can often get a better deal by seeing the potential in a home or being willing to live without a certain amenity most people want.

15. Check your commute to work

Before buying a house, it's important to consider your commute to work. You may want to live closer to your office if you have a long drive. If you rely on public transportation, make sure there are buses or trains that go to your desired neighborhood. If a house is near a busy train line, the noise and traffic can be a nuisance.

By taking the time to research your commute, you can choose a house that will make getting to work easier and less stressful. Kelan and Brittany Kline, owners of The Savvy Couple, say to ask yourself the following:

• How much is your commute to work going to change your daily routine?
• How long will it take you to get to work?
• How long will it take you to get home?

The answers to these questions will affect your quality of life daily and are worth factoring into your home-buying decision.

16. Don’t assume a home will give you a big tax break

This might come as a shock, but "you should pretty much ignore the whole ‘buying a house comes with so many tax benefits’ spiel unless you've run the numbers yourself," says CPA Logan Allec.

When figuring out your taxes, consider the mortgage interest you pay annually, your property taxes, your marginal tax rate, and any other itemized deductions you might have. Reach out to an accountant if you need help doing so. You might realize that while you might get some tax benefits from homeownership, it might not be as significant as you originally thought.

17. You don’t have to ask people their opinions on the house

When you’re a first-time homebuyer, it’s tempting to get as much advice as possible. For example, you might ask your parents to come along for a tour. While it might be helpful to get outside opinions at times, especially if you have a friend who is an experienced contractor, the truth is that the only opinion that matters is yours.

Forrest McCall, founder of Don’t Work Another Day, said, "When purchasing a home, you'll likely get opinions from many different people." However, he also stressed that "avoiding others' opinions will make the process less stressful and ensure that you find the right home that suits your wants and needs."

The truth is, you’re the one who has to live there. If you’re spending your own money on the home, it's what you want that's most important. Your family, Realtor, and even your friends might have their own ideas about what’s best for you, but you don’t have to take their advice if you don’t want to.

18. Look beyond aesthetics. The wiring is more important

When purchasing a home, it’s wise to look beyond a carefully curated staged home to understand whether it is updated or full of costly, hidden repairs.

Michelle Onake, an Intentional Money Coach, says to look to see whether or not the outlets are three-prong. "If so," she says, "verify that they are actually grounded if the house was built pre-1970s." (A grounded outlet helps protect your devices from a power surge.)

Onake also recommends asking what the water pipes are made of, what type of foundation the home is on, whether or not the house has natural gas, and when the furnace was replaced.

19. Ask if the basement has ever flooded

Homes are a big investment, and basement flooding can cause significant damage. Before buying a home, it is important to ask if the basement has ever flooded. If the answer is yes, you should find out how much water was involved, what caused the flood, and whether the problem has been remediated. Flooding can occur for various reasons, including heavy rains, faulty sump pumps, and broken pipes.

In some cases, mitigating the risk of flooding may be possible by making repairs or taking preventive action. However, in other cases, such as when a home is built in a floodplain, the flood risk may be too high to justify the purchase.

Asking about flooding incidents before buying a house can help you make an informed decision about whether or not to proceed with the purchase. You can also talk to the neighbors to see if their houses have flooded.

20. Consider that you might want to rent it out someday

"Each property you buy, unless it is your forever house, should be viewed as a future rental," says Dustin Heiner, founder of Master Passive Income. "Each time you move," he explains, "keep the original property, rent it to tenants, make money in passive income, and use it to help you pay the mortgage for your new house." Once you do this several times, Heiner says, you’ll acquire a portfolio of properties that can create cash flow in the future.

Whitney Hansen, host of the Money Nerds Podcast, agrees. She said, "If I could go back and give myself advice, I would only look at properties that had the potential to generate income."

21. New kitchens and bathrooms cost more than you think

Many people buy homes with outdated kitchens and bathrooms, thinking they’ll save money on the cost of the house and upgrade down the road. However, Jacob Wade, founder of Roadmap Money, says consumers often underestimate the cost of renovations.

He explained, "After pricing out kitchen and bathroom remodels, it was mind-blowing to see that costs could be as high as $100,000 just to improve the house." Wade decided to DIY many renovations, but "still dumped $20,000-plus into the house for basic upgrades."

22. Calculate the cost of maintaining the landscaping or hiring it out

"The surprise for us was outside of the house," says Jim Wang, founder of Wallet Hacks. "We missed how much maintenance we had on our trees, which sometimes meant we had to take some of them down when they endangered the house."

Apart from tree care, you can also expect to deal with weeds, overgrowth, and pests. These landscaping expenses can add up, so it’s something to be aware of when purchasing a home.

23. Ask if the house comes with a home warranty

A home warranty is a type of insurance that helps to protect homeowners from the costs of repairs and replacements for their major home systems and appliances. Many people purchase a home warranty when they buy a new home to have peace of mind in case something goes wrong.

However, before buying a home warranty, it is important to research and ask some important questions. First, what does the warranty cover? Some home warranties cover only certain items, such as appliances or the HVAC system. Others may provide more comprehensive coverage. It is important to know what's included to ensure you get the coverage you need.

Second, what is the term of the warranty? Home warranties typically last for one year, but some companies offer multi-year plans. Make sure to ask about the coverage length to be prepared for any eventualities. Finally, what is the cost of maintaining the warranty? Home warranties can vary widely in price.

24. Don't expect an inspection to catch every issue

Most potential home buyers rely on an inspection to catch costly maintenance issues. However, it’s still possible for an inspector to miss things. "During our home inspection, the air conditioner was tested and passed because it kicked on as expected," says Tana Williams, owner of Debt Free Forties. "However, the home inspector did not check that it actually cooled correctly."

Williams purchased her home during the cooler months, so the A/C seemed to work fine. But once summer arrived, her 20-year-old A/C unit couldn’t keep up with temperatures in the high 80’s. This resulted in a costly repair.

Additionally, Rachel Hernandez, author and real estate investor, says, "Be sure to hire your own home inspector… It’s worth it to hire someone who works for you but you must also be part of the inspection process to have total peace of mind."

25. Ask about neighborhood restrictions and rules

When buying a house, it's important to ask about neighborhood restrictions. These restrictions can be imposed by the homeowners association (HOA) or the city or county. They can limit what you can do with your property, how you can maintain your yard, and even what kind of home improvements you can make.

For example, your neighborhood could regulate exterior paint colors or whether you can park an RV or boat in your driveway. So before you sign on the dotted line, make sure you understand all restrictions that apply to the property.

26. Don't assume the curtains come with the house

Many home purchases may include items like curtains and blinds. However, it's important to ask if that's the case. For example, a couple of weeks before I bought my home, I learned the homeowner wanted to take the curtains with her but offered to sell them to me. The same went for a light fixture and a wine fridge.

This was a bit of a surprise, and we ended up negotiating with them since I didn’t want to purchase all new curtains and a wine fridge. In the end, I didn't have to buy the light fixture, but I did end up paying $500 for the mini-fridge and curtains, a last-minute expense I didn't expect.

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Home prices are dropping in some markets, and the average home is taking longer to sell. You could be in for a tough time if you don't price your home right, market it well, and expertly negotiate a sale.

Here are nine qualities a realtor should demonstrate to sell your home effectively in today's market.

1. Successful track record

This is the most important quality to look for in a realtor. You want someone who has a history of getting homes sold, even in tough markets. Ask your friends, family, neighbors, or co-workers if they know any good, reliable agents with good reputations. Then look at the realtor's website for their bio and history of homes sold, and directly contact the agent to ask.

>> GET A FULL-SERVICE AGENT AT A 1.5% COMMISSION. Get personalized agent matches today from Semya-Moya with no obligation.

2. Responds quickly

"It's critical that consumers are interviewing at least three agents," says Dylan Lennon, a broker/realtor at Keller Williams. So take note of "how quickly do they pick up the phone, respond to a text, and answer their e-mail." You need them to be responsive, so if their initial response is slow, that could be a red flag.

3. Works full-time in real estate

Find a full-time agent who will focus on you in this challenging market. Part-time realtors can be very good, but "their full attention may not be dedicated to marketing efforts, showing your property personally or being available for inspections/appraisals and ultimately in dealing with the transaction side of getting the deal to closing," says Scott Wheeler, a 20-year realtor in Palm Beach County, Florida.

4. Good reputation

"Take a look at the realtor's website and see what other people are saying about them," advises Ken Sisson, a realtor in Studio City, California. They may show customer endorsements on their sites, but also Google them to find online reviews. Evaluate any negative reviews to determine if it's a red flag for you.

>>GET THE FACTS BEFORE YOU SELL. Sign up for free weekly tips from Semya-Moya's news team.

5. Neighborhood knowledge

Your realtor should know the ins and outs of the area around your home. It's a big plus if they've sold in your neighborhood previously. They should know about the schools, the crime rate, local amenities, upcoming development projects, and anything else that might affect your home's value.

6. Large network of other agents

"Ask your broker how well are they connected to the brokers in the immediate market," suggests Chris Davis, a realtor who has sold more than 120 homes in Maine. A good realtor will know many other agents and work with them to bring in buyers. Your realtor doesn't have to find a buyer on their own. They'll split the commission if another agent brings the buyer.

> Related: Average Real Estate Commission Rates by State

7. Creative marketing strategies

In a housing recession, you need a realtor who is willing to think outside the box to market your home. Traditional methods like open houses and signs aren't enough. Look for a realtor who uses things like social media marketing, targeted online advertising, video, and drone photography.

> Related: Home Sellers Shouldn't Skimp on Professional Photos in This Tougher Market

8. Good communication

"A real estate agent who understands and complements your personality will allow for open communication and a relaxed setting," says Nick Polyushkin, a licensed real estate broker and co-founder of Ofirio. You need an agent who will listen and offer guidance you can trust.

9. Knows how to sell

"Consumers should look for realtors that aren’t just into selling a house, but know how to listen and pay attention to every small detail," advises Shaun Martin, CEO of Cash For Houses.

"A good closer is what you need, but in order to be a good closer and negotiator, a realtor should be sensitive enough to details and signals a seller gives, when pricing and selling their house."

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The data comes from a poll of 1,000 Americans by Semya-Moya. The report found that a large part of this stress is related to peoples' finances — with a staggering 80% of Americans stressed about the cost of living.

Fortunately, there are steps Americans can take to alleviate financial stress and better prepare for the future.

1. Set up an automatic savings transfer

More than half of Americans (61%) cite managing money as a source of stress, making it a more common source of stress than their homes (49%), relationships (48%), or jobs (45%).

Building a savings account is one of the best ways to alleviate money stress, and you can start by setting up a recurring automatic transfer. Even if you begin with transferring just $5 a week to a savings account, getting into the habit is more important than depositing a large amount.

2. Organize your bills

A lack of information and organization regarding your financial situation can also contribute to stress. Although it can be hard to check your bank account every day, taking stock of your financial health will help establish a sense of control over your bills.

Andrew Daniels, the founder of Family Money Plan, suggests making a list of all of your monthly expenses.

"Write down what day your bills are due, and compare that to your monthly income," Daniels said. "Keep track throughout the month, and pay attention to your inflow and outflow."

Daniels said checking the numbers can be done in as little as five minutes a day, and doing so can help you feel more in command of your finances.

3. Build your credit.

If you don't know what your credit score is, there's an easy way to find out. You can use a free service, such as Credit Karma or Credit Sesame, to get an update on your score. Like most things, a little bit of knowledge goes a long way.

Although it might seem intimidating at first, an understanding of how to improve your credit can help you make more informed financial decisions — something especially useful to the 44% of Americans who report feeling stressed about their lack of financial literacy.

4. Find financial mentors

Asking people you know for advice about your financial situation can be difficult — even more so when 53% of Americans are stressed about having less money than their friends. But seeking out a mentor can help you stay accountable on your money journey.

The best mentor is someone who has been in similar circumstances to you, but is a couple of years ahead in terms of financial progress. For example, someone who recently got out of debt, or recently raised their credit score by 50 points, is more likely to be familiar with your financial struggles than someone 20 years your senior.

5. Take advantage of employee resources

Nearly 3 in 5 Americans (57%) say they're stressed about not having enough money saved for retirement.

If your employer provides benefits such as a retirement match, life insurance, or similar financial perks, now is a good time to ask your boss or human resources department to help you understand each aspect of what your job offers.

6. Prioritize and simplify

The idea that Americans must cut all unnecessary expenses from their budgets is a common refrain in articles about money management. But don't take that advice overly literally. In reality, we all have different priorities.

For example, one person might view their yoga studio membership as essential, while someone else might have a membership and never use it. Think about what you value most in your life. What is your top priority? Is it traveling? Is it eating healthy, organic food? Whatever it is, don't rush to abandon the pursuit that most enriches your life. Only cut what falls lower on your list of priorities.

This gives you permission to continue enjoying the things you value. Then, by cutting out the things you don't, such as your cable subscription, you can still free up cash flow and improve your financial situation.

7. Create specific goals

Have you ever noticed that whenever people sign up for a race, they start to run a lot to prepare? It’s the same with money goals.

First, take your time and familiarize yourself with your finances by following the previous tips. That means understanding your employer's benefits, knowing your numbers, examining your expenses, and choosing your financial priorities. Once you do this, you’re better able to create specific financial goals.

From there, choose a goal and give yourself a deadline. Create some accountability by sharing your goal with your mentors or trusted friends. The more specific the goal and the more accountability you have, the more likely you are to achieve it.

Ultimately, when it comes to financial stress, be kind to yourself. Reducing money stress is not something that happens overnight. It will take consistent effort and time to improve your financial situation, but it’s certainly worth it.

Reducing stress means better health, and learning about your money is an empowering process. Start today with the tips listed above, and take the first steps to reduce your financial stress once and for all.

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A high inflation rate means you will likely spend more on everyday essentials, like groceries. That, in turn, means less cash available to save for house down payments, closing costs, or upgrades, all of which can cost tens of thousands of dollars.

There is hope, though. According to a survey by Self, a resounding 45% of working Americans supplement their income with side hustles. The survey of more than 1,100 Americans found many use side hustles, earning an average of $897.04 per month.

That’s money you can use to prepare for homeownership. Here are a few examples:

• Pay down debt: If you have high-interest debt, paying it down could raise your credit score. A good credit score typically qualifies you for competitive mortgage interest rates, saving you thousands over the course of the loan.
• Save for a down payment: If you put 20% down on a home, you can avoid paying private mortgage insurance (PMI), which adds another monthly bill.
• Pay closing costs: Your mortgage company should give you an estimate of the money due at closing. First-time homebuyers often don’t realize you’ll pay large expenses at closing, like paying for months of homeowners insurance in advance. After saving so much for a down payment, closing costs can come as a shock.

A side hustle can help fund these goals, cover basic monthly expenses, and alleviate financial stress. In fact, a recent Bankrate gig survey showed that "41 percent of U.S. adults with a side job in 2022 need the extra income to pay for everyday living expenses."

Self also reported that 32.2% of Americans use their side hustle income for disposable spending, and 29.8% use it to save and invest. The goal is to get to a financial position where your side hustle income is an asset that helps you to reach larger financial goals, rather than a necessity because the cost of living is too high.

These people saved up with side hustles

If you can earn enough from your side hustle to utilize it for purposes beyond basic needs, consider using it to help pay for a house. Your side hustle income can help contribute to savings for a down payment, closing costs, renovations, and furniture.

Lindsey Morris, the creator of Annie’s Inspo, said, "I earned $39k in profit from reselling products on Amazon. I used this money to bring to closing for the down payment of our house."

Bhawna Balchandani, the founder of Penny Calling Penny, said she became a freelance proofreader and content writer on the side to make extra money. Additionally, she sold her own photos to Shutterstock. This enabled her to save just over $5,000 in a few months. She said, "That money was used up for the down payment of my dream house."

In 2005, at the height of the real estate market, Jim Wang purchased a townhouse in Maryland for $295,000. At the time, Wang explained he had to take out a first and second mortgage as he didn’t have the cash to put a full 20% down. The second mortgage was $15,000 and came with a high-interest rate, so Wang wanted to pay it off as soon as possible.

Fortunately, the year before, Wang started his first blog as a side hustle. It took a couple of years before the website produced more than a few hundred dollars a month. But, once it did, Wang was able to use the extra cash "to aggressively pay down that second mortgage as quickly as possible."

John Pham also used blog income to help him achieve his real estate goals. After years of helping others grow their websites behind the scenes, he decided to start his own blog, The Money Ninja, during the pandemic.

His site, which he worked on in addition to having a full-time corporate job, enabled him to produce enough extra income to put 20% down ($181,000) on a $905,000 Boston penthouse.

What side gigs might you do?

Of course, your side hustle doesn't have to bring in hundreds of thousands of dollars to be considered a success. For many Americans, having an extra $500 to $1,000 a month can make a marked difference in their ability to pay their bills or enjoy some small luxuries, like dinners out or a weekend trip every now and then.

The best way to choose a side hustle is to lean into skills or talents you already have. For example, consider becoming a fitness teacher if you enjoy taking fitness classes. If you like being around children, ask for babysitting jobs, which can be very lucrative.

You could be a barista if you can only work extra hours early in the morning. If you need to keep your time flexible, driving for Uber or Lyft might be a great option.

If you’re an excellent writer, there are many places online where you can get paid to produce content. If you’ve been acting all your life, try your hand at getting paid to do voiceovers.

Whatever you choose, a side hustle should bring in income and even add a little joy to your life. It’s a way Americans can take their financial lives into their own hands and earn enough to weather an economy with an uncertain future.

With enough consistency, you can grow your side hustle into a small business that creates a solid monthly income. Then, you can decide how you want to spend it, whether it’s your regular monthly bills, family needs, hobbies – or a home.

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The Semya-Moya survey of 1,000 retirees also found 41% of respondents would have delayed their golden years had they known inflation would climb so high in 2022. Many retirees are carrying medical debt and making sacrifices — even skipping meals — to make their savings last.

What caused a retirement savings crisis?

There are a few key reasons why so many Americans have trouble saving for retirement. Firstly, wages are not keeping up with inflation, making it challenging to build a retirement cushion when grocery and gasoline prices skyrocket.

Because of inflation, 93% of Americans say they have cut costs. However, according to another Clever survey on inflation, only 37% experienced an income increase in 2022. As the gap between earnings and inflation widens, those nearing retirement age might have to delay their plans or get by with less discretionary income than expected during their retirement.

Another problem is rising health care costs, which burden those already struggling to save money. Those who don't have access to employer-sponsored insurance plans or adequate public health coverage may have to pay out-of-pocket expenses that eat into their potential savings. Additionally, some people may not know how much they'll need to cover medical expenses in retirement or what types of health care plans will be available when they retire.

A data brief from HealthView Services reports even a short period of high inflation can drastically increase the amount of money retirees will need to cover health care needs in the long term. These health care costs will likely exceed their Social Security benefits, meaning retirees need more savings to cover their basic needs.

"The (Social Security) program was never meant to be the sole source of income during retirement," said John Pham, a personal finance expert and founder of The Money Ninja. Yet, Clever's survey found 30% of retirees rely solely on Social Security in retirement.

If health care costs continue rising and Social Security is not adequate to cover these costs, more seniors will be left scrambling. Many retirees might be unable to meet their basic needs and cover modest living expenses, let alone plan for serious health issues or long-term care.

Financial advisor Walter Russell, CEO of Russell and Associates LLC, said a general lack of financial education also contributes to Americans not saving enough for retirement.

"Financial education has not been passed down inside the family walls," Russell said.

That sentiment is consistent with retirees' most common savings-related regret: Clever's survey found 67% retirees wish they had better understood retirement savings when they were still working.

Improving the retirement outlook

Retirees or those who want to retire soon can take several steps to lessen their financial burdens. Prioritizing paying off debt, for example, can do much to help alleviate both financial and emotional stress.

Clever's research reports a significant majority of retirees (71%) carry non-mortgage debt, averaging just under $20,000. Monthly payments on loans, credit cards, cars, and other expenses can negatively impact cash flow, an essential part of retirement planning.

Just under one-third of retirees (32%) said they have considered working again, whether that's consulting, part-time work, or full-time work. Putting retirement on pause, while not ideal, may be the best available solution for the 57% of retirees who were surprised by how expensive retirement can be.

Lastly, of retirees who stopped working earlier than they planned, Clever's data shows 50% of them left work because of health issues. An early exit from the workforce could drastically reduce available retirement funds, making it challenging to stretch retirement savings to cover necessary expenses.

The finding shows that if more people prioritized their physical health, they'd have a good chance of reducing their future medical costs and improving their quality of life in retirement.

• 13 Surprising Things About Retiree’s Finances in 2023
• Buying Vs. Renting in Retirement: Which is the Better Idea?

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If you’re interested in this type of income stream, it’s important to know you don’t actually have to own a home to become an Airbnb host. In fact, many hosts lease apartments and then list them on Airbnb. This strategy has a much lower barrier to entry than purchasing a condo or home.

Listing a leased apartment is now even more accessible due to a recently launched Airbnb service called Airbnb-friendly Apartments. As a part of this service, Airbnb partners with landlords who approve tenant-created listings on Airbnb. With this Airbnb service,renters can seek out an income-producing rental in an Airbnb-friendly building posted by the property owner.

The first step to earning money with a rented apartment

If you don’t live in a city listed on Airbnb-friendly apartments, you can still find places you’re allowed to sublet by doing the legwork yourself. Dennis Shirshikov is a strategist at Awning.com, a real estate brokerage for investors and an Airbnb property management company. He rents out his own apartment on Airbnb but made sure to get his landlord’s permission first.

Shirshikov explains, "I know that subletting without permission can be a violation of my lease, and I wanted to make sure I was following the rules." Luckily, his landlord was supportive of the idea. The result, he says, is "On average, I earn enough through Airbnb to cover about half of my monthly rent."

Gulshan Hajara Banu, a biotechnologist and founder of Pest Keen said the same thing. She said, "On average, my Airbnb guests pay about half of my monthly rent. This has been a win-win situation for both myself and my landlord."

According to data from Smart Asset, tenants who list private rooms in large cities can often cover a significant portion of their rent. In Chicago, for example, the average monthly rent for a two-bedroom apartment is $1,727 while the average private room rents for $75 per night on Airbnb. With a typical occupancy rate of 71%, Chicago tenants can expect, on average, to get 93% of their rent covered by listing one of their two bedrooms on Airbnb.

In other top cities, such as Houston, Philadelphia, Dallas, San Diego, and Miami, private rooms can cover between 90–106% of a host's monthly rent.

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Earning enough money from your Airbnb to cover a significant portion of your rent depends not only on your location but also on the demand for short-term rentals. However, the amenities you offer and how welcoming you are as a host will also affect your booking rate. Here are some tips for making your Airbnb listing a success.

Tips for earning money as an Airbnb host

1. Create an inviting atmosphere in your Airbnb space. Provide guests with amenities such as toiletries and snacks to make them feel welcome and comfortable.

2. Develop a consistent cleaning routine. This routine should be thorough yet efficient to get the most out of each booking without wasting too much time in between.

3. Promote your rental online through social media. Create an account for your listing. Make sure to use positive words, helpful photos, hashtags, and accurate descriptions so people know what they’re getting before they arrive.

4. Research the going rate for similar Airbnb rentals in your area. This will help you set competitive prices that will draw more customers without pricing yourself out of the market.

5. Take advantage of local attractions or events when possible. Include photos of concerts, festivals, museums that are close by, and more to show your guests your place is in a great location.

6. When accepting bookings, take into account any special requests. As long as these requests are mostly reasonable, sometimes paying attention to the little details can garner positive reviews.

7. Keep up with trends and make improvements when necessary. For example, think of adding new technology features or changing furniture pieces when things get old and worn. Purchasing new sheets every few months is an easy way to update your space without spending thousands on upgrades.

>>MORE: 10 Tips Airbnb Hosts Wish They’d Known When Starting Out

Ultimately, being an effective Airbnb host takes some effort, but it’s certainly worth it if you’re able to turn a profit.

Potential for full-time income as an Airbnb host

Recently, Business Insider interviewed Inayah McMillan, a 20-year-old who has made listing rentals on Airbnb a full-time business. McMillan started with one rental, but she now manages several, grossing her business to $375,000 in revenue in 2022.

She’s also turned her experiences into learning opportunities for others, teaching courses on how to grow a business from Airbnb rental properties. What’s most fascinating about her success is that she doesn't own any of the apartments or homes in her Airbnb listings. She rents all of them and then sublets them to Airbnb guests.

Her system shows potential Airbnb hosts what’s possible on a larger scale, without ever having to take out a mortgage or come up with a large down payment for a home. That said, real estate — like any investment —comes with inherent risk.

» MORE: 28 Creative Ways to Save for a Down Payment

The uncertain future of Airbnb listings

Before deciding to invest time and money into becoming an Airbnb host, it's important to take time to research laws, restrictions, and zoning requirements in your area.

Time recently reported that many Airbnb rentals are sitting empty. In fact, Airbnb occupancy rates dropped in 31 of the platform's top 50 U.S. markets between July and September, according to AirDNA, a company that provides data about short-term rentals.

One reason why many Airbnb listings could be empty is that a wave of wealthy real estate investors purchased second homes and created listings during the pandemic home buying frenzy. This created a large supply of short-term rentals.

While a broader selection of short-term rentals may be good news for travelers who are hunting for a good deal, it’s not so great for the overall housing supply crisis, as many locals in popular cities cannot find affordable rent prices or available units in their areas. Many Airbnb listings occupy space that might have previously gone to a local, long-term tenant. Some cities are responding by cracking down on short-term rental hosts.

For example, during the pandemic, many hosts struggled financially due to waves of cancellations. Additionally, many cities enacted zoning laws to limit Airbnb listings. For example, New York just put out a new set of short-term rental regulations that could potentially remove thousands of Airbnb listings from the rental market should owners fail to provide proof that they live in the units. The reason for the stricter requirements, according to New York State Senator Liz Krueger, is that, "In the middle of an ongoing affordable housing crisis, every single unit matters."

Despite headwinds, AirDNA predicts growth in both supply and demand for short-term housing in 2023, as shown in the chart below.

Source: AirDNA

Final thoughts on earning money in real estate as a renter

So, is it possible to earn money as an Airbnb host or a renter? The answer is, "Yes, but it depends."

If your city allows you to host Airbnb guests and you live in a desirable area with close proximity to attractions tourists want to see, it’s possible you can earn money as an Airbnb host. If you live in an area that has a severe housing shortage and is limiting what Airbnb hosts can and cannot do, it’s wise to do your research to ensure you can turn a profit before investing your time and resources.

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Many 2022 hotspots like Salt Lake City, Boise City, and Spokane have given way to mid-range cities like Hartford, El Paso, and Chattanooga. Affordability is driving the shifts, says Realtor.com Chief Economist Danielle Hale.

"The top markets expected to perform well next year offer a solid mix of local economic conditions, proximity to larger employment centers, and critically, more affordable housing," Hale writes. "Even in an environment where families are finding that their dollars no longer stretch as far as they did just a few months ago, cities like Hartford, El Paso, Louisville, or Chattanooga offer a larger share of affordable homes for a median income."

Source: Realtor.com

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Affordability will drive 2023 home buying trends

U.S. Census data shows that the median household income in 2021 was $70,784. Yet, today's households need to earn approximately $107,000 to afford an average home, a 46% increase from 2021, according to Redfin.

There are several reasons for the affordability crisis. First, the U.S. has suffered from a chronically low supply of homes since the Great Recession of 2008, according to the Economic Policy Institute.

In addition, the supply of affordable, new construction homes below 1,400 square feet has been declining for decades. This makes it especially challenging for first-time homebuyers and lower-income buyers to purchase a home.

Source: Freddie Mac

Also, record-low mortgage rates and mass migration of newly remote workers led to exceptionally high buyer demand during the pandemic, pushing prices 45% higher than they were in December 2019.

As buyers competed heavily for homes, the median home price reached an all-time high in June 2022. Then the Fed began hiking interest rates in an attempt to curb inflation, bringing mortgage rates from a lower of 3.1% at the start of 2022 to 7%+ in early November.

The jump in borrowing costs meant buyers were suddenly paying 50% more per month to buy a median-priced home.

As affordability woes pushed would-be buyers to the sidelines, the market came to a halt. Year-over-year home sales are down more than 35% as of November. While the drop in buyer demand has brought more stability to home prices in recent months, homes remain unaffordable to huge swaths of buyers.

For those who remain in the game, affordability is key.

Among the top 10 housing markets positioned for growth in 2023, Realtor.com reports that "about 23% of housing inventory is affordable at the median income level." This compares to 17% of the affordable housing stock among the largest 100 U.S. metros.

In their quest for affordability, many home buyers have begun looking across city and state lines.

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More home buyers are considering a long-distance move

Realtor.com's top housing market for 2023 is Hartford, Connecticut, with a median home price of $372,000. More than 60% of views for home listings in the city come from outside the metro. In Columbia, S.C., which ranks 8th on Realtor.com's list, more than 75% of views come from outside the city.

As reported by Realtor.com, more than 60% of prospective home buyers are searching for homes outside of their current cities, compared to only 50% of home shoppers who searched outside their metros during the pandemic.

The concentration of buyers looking elsewhere is even higher in parts of the West and Northeast, where as many as 69% of home searchers are looking outside their current area.

Redfin data also shows "an unprecedented portion are relocating to new metros." In fact, reports Redfin, "nearly one-quarter (24.1%) of U.S. home buyers looked to move to a different metro area in the three months ending in October."

Source: Redfin

Like Realtor.com, Redfin sees users leaving more expensive metro areas like New York City and San Francisco in favor of more affordable places to live.

However, their data shows that Seattle, Phoenix, and several Florida cities remain top destinations as we head into 2023. By contrast, Realtor.com expects more affordable metros in the Northeast, South, and Midwest to take over as top home-buying destinations in the year ahead.

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"Solid job prospects without the big-city price tag"

In 2022, many people moved from large tech hubs like San Francisco and New York to smaller, less expensive cities — including Salt Lake City, Boise, and Spokane — seen as more budget-friendly to remote tech workers.

As reported last year by Realtor.com, "Shoppers looking for real estate in these areas are coming from tech centers where real estate is even more competitive, pricey, and sometimes feels out of reach."

The rise in work-from-home jobs meant that many tech workers didn’t have to stay in expensive areas but could move and do their jobs in locations where their salaries went further. However, as more buyers moved in, these same markets became less affordable.

Salt Lake City, for example, saw home prices rise nearly 15% in 2022, compared to an average of 10.5% across Realtor.com's top 10 metros for 2023.

Many of the cities topping Realtor.com's 2023 top housing market list largely "flew under the radar" during the pandemic, notes Hale. However, they offer today's buyers solid job prospects, plus a larger share of the housing stock that remains affordable to the middle class.

Jobs in these metros offer less focus on tech and more on healthcare, government, and education. While not as friendly to remote workers, these sectors provide stability.

Final thoughts: Americans will continue to move where they can afford

According to a recent Harris Poll, "Six in 10 Americans report that their housing costs have soared since the pandemic started, regardless of their homeownership status." Additionally, when they polled Americans who had moved in the past 2.5 years, 64% said it was to find more affordable housing, and 63% said it was to be in an area with a lower cost of living.

Americans want to live and work in places that allow them to afford their lifestyles. Affordability remains a big challenge, so 2023 will likely drive more buyers to less expensive areas.

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12 Housing Market Predictions for 2023

Although no one knows what next year will bring for the housing market, we rounded up the experts to weigh in. Here's what they expect from 2023.

The post The Top Housing Markets for 2023 Look Nothing Like 2022 appeared first on Semya-Moya.

Home affordability has reached the point where consumers need to earn over $100,000 to afford a typical home. As a result, many are wondering if home prices will fall in 2023, if a buyers market is coming, or if they should just give up and move abroad instead.

Although no one knows exactly what the next year will bring, we rounded up the experts to weigh in. Here are their housing market predictions for 2023.

1. Home sales will plummet

Source: Redfin

About 4.3 million homes will be sold in 2023, according to Redfin’s 2023 Housing Market Predictions. "That’s fewer home sales than any year since 2011, when the U.S. was reeling from the subprime mortgage crisis," the report states.

The reason? Many people can't afford to buy with mortgage rates hovering around 7%. And many homeowners holding lower rates don't want to sell. The result, according to Redfin, will be a further decline in new listings in 2023. However, this is just one possible scenario, and inflation also will affect the number of homes sold.

>>OUTSMART THE MARKET. Get Semya-Moya's free weekly newsletter for homeowners, buyers and sellers.

2. Mortgage interest rates will drop below 6%

The most recent Mortgage Finance Forecast from the Mortgage Bankers Association (MBA) predicts a 5.4% mortgage interest rate by the end of 2023. Redfin predicts that by the end of 2023, mortgage rates will be at 5.8%.

And Lawrence Yun, chief economist for the National Association of Realtors (NAR), says a 6% rate will be available but only "to those willing to go with a five-year ARM."

Of course, these are just estimates. Other experts and analysts don’t see rates coming in quite that low. For example, Zillow Senior Economist Jeff Tucker predicts mortgage rates will stay at current levels.

3. The median home price will flatline or fall

Despite the predicted decline in home sales in 2023, Lawrence Yun expects home prices to hold steady in 2023. In fact, he predicts they will rise a slight 0.3% to $385,00.

However, other economists maintain a gloomier outlook. Redfin, for example, expects home prices to fall by 4% over the next year. Moreover, Moody’s Analytics expects that many of the most "significantly overvalued" markets will fall by as much as 15% to 20%.

4. There won’t be a lot of foreclosures

With current market conditions, experts don't expect any significant in foreclosures.

Rick Sharga, executive vice president of market intelligence at ATTOM Data, explains: "Foreclosure starts were up roughly 1% in the third quarter from last quarter, and 167% from a year ago, coming within range of what they were pre-pandemic." This is largely due to the end of the Covid-19 foreclosure moratorium, which happened in September 2021.

However, Sharga points out that foreclosure activity remains well below pre-pandemic levels and doesn’t expect it to return to normal until mid-2023. In addition, Sharga explains that there won’t be many more foreclosures because many homeowners have significant home equity.

Another factor is that the job market remains strong for now, lessening the likelihood of foreclosures from mass unemployment.

5. Average rent prices will increase

According to the Bureau of Labor Statistics, rents rose 12.2% for new tenants and 3.5% for existing tenants in 2022. Moreover, HouseCanary reported that single-family homes hit an average rent of $2,495 a month in the first half of the year, representing a 13.4% increase over the same period in 2021.

Realtor.com’s National Housing Forecast predicts rental prices will continue to rise in 2023 by 6.3% as renters compete for a limited number of vacancies. In fact, the report reveals that the five-month vacancy rate has stayed below 6% for the first time since 1985, largely driven by high home prices and market uncertainty.

According to Realtor.com, "U.S. renters will continue to face challenges from limited supply and excess demand in the coming year that will keep upward pressure on rent growth."

Source: Bureau of Labor Statistics

6. More homeowners will become first-time landlords

As a result of these high rents, more people might keep their homes and rent them out if they have to move to a new location, says Robert Taylor, The Real Estate Solutions Guy.

"Homeowners who are forced to move due to jobs or life events will lament losing historically low-interest rate mortgages and will add their homes to the rental market," he says.

Not all homeowners will be eligible to carry two mortgages. Still, if they can find renters quickly (a likely scenario in 2023), they may be able to use their first home as a cash-generating real estate investment.

>>STAY AHEAD OF THE TRENDS Get Semya-Moya's free monthly market update for property investors.

7. Renovations will focus on outdoor spaces and energy-efficient retrofits

The Leading Indicator of Remodeling Activity (LIRA) shows, "Homeowner remodeling and repair spending will shrink from 16.1% in 2022 to 6.5% by the third quarter of 2023."

Most homeowners have equity to complete home remodels, but the prices for materials and labor are still extremely high.

Still, many homeowners holding low mortgage rates are not interested in moving and might be in their homes longer than expected. Kristin Swenson of Yardzen, an online design platform, says homeowners will be "asking more of their indoor and outdoor spaces as they look ahead to several years at the same address."

Swensen recommends homeowners invest in curb appeal and outdoor spaces to help their homes stand out when it is time for them to sell.

Source: Harvard Joint Center for Housing Studies

8. Joint purchases will gain popularity

Matt Teifke, founder and CEO of Teifke Real Estate, expects joint home purchases to become a more popular option in 2023. In addition, because of rising home prices, friends and family members might consider cohabitating to become homeowners without having the full burden of homeownership costs.

A 2022 joint study between Realtor.com and HarrisX found that "nearly one third (31%) of all Americans and 41% of 18- to 34-year-olds have bought a primary residence with someone they aren’t married to." Co-buyers were romantic partners (15%), siblings or other relatives (4%), and even friends (4%).

It’s important to note that purchasing a home with someone else is a significant decision, and consumers should weigh the pros and cons.

9. People will move to less expensive areas like the Midwest

Zillow predicts the lower housing prices in much of the Midwest "will allow first-time buyers to take the plunge." The Midwest stands out, especially with the current home inventory crisis. Zillow reports, "Having available houses to choose from is another key component of a healthy market, and the Midwest stands out – inventory isn’t in a massive hole."

Research from the National Association of Realtors shows Atlanta will be the top market in 2023. A close second will be Raleigh, North Carolina.

10. More tenants will Airbnb their apartments

According to Alex Byder, the founder of estate investment company BD Homebuyer, "Airbnb is implementing a new feature that will let tenants rent out their rented apartments when they're out of town." The new Airbnb-friendly rental platform, rolled out last month, helps renters find apartment buildings that are Airbnb-friendly. Byder says, "This will be a huge factor to help subsidize the cost of rent in many areas."

11. A trend toward greener homes

Because of recent laws like the Inflation Reduction Act, commercial and residential builders will be more likely to incorporate green technology. Although many homes have trended this way for years, this new law means we could see an even bigger surge of energy-efficient homes in 2023.

The 2022 Realtors and Sustainability Report showed "half of agents and brokers surveyed said they helped a client buy or sell a property with green features during the past 12 months," up from 32% in 2021. Interestingly, the report also showed 35% of respondents said their MLS had a green data field, allowing homeowners to look for houses with these features.

12. Increase in commercial to residential conversions

David Bitton, the co-founder and CMO of DoorLoop, says, "The demand for commercial spaces has drastically declined as companies adapt to flexible work." This has caused many companies to reconsider their commercial spaces and how much they need. Bitton says this might lead to commercial to residential conversions, especially if "zoning laws are adjusted, and financial incentives are offered to developers who will make the renovations to accommodate this."

Coldwell Banker Richard Ellis (CBRE), the world’s largest commercial real estate services and investment firm, shared an analysis that showed 36 conversions completed on average in the U.S. from 2016 to 2021. In 2022, 42 have been completed, and 21 are expected to be completed by the end of the year.

Still, they said, current conversions amount to roughly 2% of the total U.S. office inventory. They concluded, "Conversions are a niche trend that will resonate more on the local level than the national level."

How to prepare for 2023

Consumers should remember that the above are predictions, but real estate generally can be unpredictable. Still, there are many ways to prepare if you’re interested in buying, selling, or investing in real estate in 2023.

Boyd Rudy, an associate broker at Dwellings Michigan, offered the following suggestions:

• Buyers: Start saving early and ensure your credit is in good shape.
• Sellers: Consider whether you’re willing to accept less than your asking price or make other concessions.
• Investors: Diversify your portfolios and monitor trends.

Ultimately, Boyd said, "by being proactive and planning ahead, everyone can weather whatever storms may come in 2023 and beyond."

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The post 12 Housing Market Predictions for 2023 appeared first on Semya-Moya.

According to the Mortgage Monitor report by Black Knight, 60% of those homes were purchased in 2022. If these underwater homeowners try to sell anytime soon, they'll need to come up with the difference between their net sale result and what they owe on their mortgages.

What does it mean when a home is underwater?

When a home is underwater, it means the homeowner owes more on the mortgage than the home is worth. For example, if a homeowner has a mortgage of $300,000 but the current value of the home has fallen to $250,000, the home is considered to be underwater.

This can make it hard to sell, because you need to come up with the difference between the mortgage and the net sale price to pay off the mortgage.

Andrew Daniels, co-founder of Millennial Homeowner, notes an additional problem for these homeowners: "Being underwater on your home can also make it difficult to refinance your mortgage, which could prevent you from taking advantage of lower interest rates in the future or changing the terms of your mortgage."

Finally, being underwater means you don't have any equity to enable a home equity loan or a home equity line of credit, or HELOC. Those are two common ways that homeowners fund a home renovation.

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1 million homes have limited equity

In addition to the underwater homes, one million homes purchased in 2022 have less than 10% equity. This means that even a small drop in the value of these homes could push them underwater as well.

Compare that to homes purchased in 2021 where "fewer than 1% of homes mortgaged are currently underwater with only 3% having limited equity."

Black Knight data reports that most limited-equity homes were purchased in May-July 2022, the peak of the real estate market.

Equity positions for homes purchased before 2022

While the data is concerning for homeowners who bought in 2022, most earlier buyers maintain positive equity in their homes.

According to the CoreLogic Homeowner Equity Insights report, "U.S. homeowners with mortgages have seen their equity increase by a total of over $2.2 trillion since the third quarter of 2021, a gain of 15.8% year over year."

Selma Hepp, CoreLogic's interim lead of the Office of the Chief Economist, says their data shows a slight increase in the average U.S. loan-to-value (LTV) ratio. But she adds: "Today’s homeowners are in a much better position to weather the current housing slowdown and a potential recession than they were 12 years ago."

In fact, the CoreLogic report says, "In the third quarter of 2022, the average homeowner gained approximately $34,300 in equity during the past year."

How does this compare to the Great Recession?

About one in four homes were underwater during the Great Recession, which lasted from December 2007 to June 2009.

Many homeowners couldn't make their mortgage payments and lost their homes. According to the report Underwater America by the Haas Institute, "From September 2008 through the end of 2013, approximately 4.9 million families lost their homes to foreclosure. Between 2010 and 2013, another 1.3 million families lost their homes to short sales."

The 2022 housing market is nowhere near that crisis level. In fact, data shows that "nationally, household equity reached 70% in the second quarter of 2022, the highest level in over 35 years." This, combined with a strong labor market, means the housing market is in a far better position than during the Great Recession.

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How homeowners can insulate against financial stress in 2023

Homeowners who purchased homes in 2022 might have concerns after reading the Mortgage Monitor report. However, consumers can take steps to insulate themselves against financial strain:

• Stay put. Historically, homes appreciate over time. According to SFGate, "National appreciation values average around 3.5 to 3.8% per year." So even if you purchased at the housing market peak in 2022, your home is likely to appreciate over time and stop being underwater.
• Stockpile savings. Daniels recommends that homeowners keep an emergency of three to six months of expenses plus a separate home maintenance fund. "It's important to have cash on hand if you know that you're living in a house that's underwater," says Daniels. "That way, if you have to move for an unexpected reason or because of a job relocation, you have the cash on hand to bring to closing if necessary."
• Renovate. Consider renovating if you have cash on hand and plan to stay in the home for a while. A home renovation can increase the home's value, getting you closer to what you paid for it. The 35th annual Cost vs. Value report by Zonda shows exterior home renovations that offer the best return on investment (ROI).

Final thoughts on underwater homes

If you have an underwater home or limited-equity home, your situation is likely to improve over time. The current situation is not nearly as as bad as the Great Recession. Still, it pays to be conservative with your money and not take on undue risks.

The post With Home Prices Dropping, 450,000 Homeowners Are Now Underwater appeared first on Semya-Moya.