Millennial Money: Prepping to buy a home or invest in 2023?

It has been quite the year. In 2022, we’ve lived through high inflation, stock market lows, housing market frenzies and ongoing Federal Reserve rate hikes. Although we don’t have a crystal ball to predict what will happen to the economy next year, we could use this year’s events as a guide: Things may continue to be rocky.

If homeownership and investing are on your 2023 goals list, here are some questions to ask yourself before whipping out your spreadsheet, money apps or notebooks.

WHAT AM I WILLING TO SACRIFICE IN TERMS OF SPACE?

Whether you have a goal of buying a new home or renting a new place next year, there’s a lot to consider. For instance, 30-year fixed mortgage rates went from an average of 3.45% in January to 6.90% in October thanks to inflation and Fed rate increases. The Fed has already raised interest rates 75 basis points four times this year. This, coupled with housing shortages, has driven the national median price of homes above $400,000 for the first time, according to the National Association of Realtors.

Homeownership may still be an attainable goal, but you might have to make some sacrifices, says Zaneilia Harris, a certified financial planner and president of Harris & Harris Wealth Management Group in Upper Marlboro, Maryland.

“You need to evaluate what you are willing to give up in space in order to own property,” Harris says. “You may have to gradually get to where you want, as opposed to just going straight into a single-family house.”

This could mean starting off with a condo or townhouse and then using the equity from the condo to purchase your next property, Harris says.

HOW CAN I MAKE HOMEOWNERSHIP MORE AFFORDABLE?

Another portal to homeownership Harris recommends is the Neighborhood Assistance Corporation of America, also known as...