Housing Is Up 4.9%, According to the September CPI. Here's How to Fit It Into Your Budget

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The Bureau of Labor Statistics just released the most recent Consumer Price Index for the cost of pretty much everything from September 2024. It's no surprise that costs are still rising, but what was a bit eye-opening was that housing was once again up 0.2% from August 2024, pushing the rise in cost of shelter for the year ending September 2024 to 4.9%.

Even as housing prices plateau and mortgage rates start to ease, costs just keep going up, both for homeowners and renters alike. But don't despair. You can find more affordable housing, even if you live in an expensive city. Here are some tips for fitting it into your budget.

1. If you rent, buy a house

Look, I know this is a tall order, and please don't stop reading because I led with it. But the fact is that buying a house is the best way to fix your housing costs for the long term.

While rent will continue to climb, when you buy a house with a fixed-rate mortgage, your principal and interest payment stays the same for the life of that loan. Yes, other expenses like insurance and taxes may rise, but those are often very small when compared to yearly rent increases.

Even if you don't think you can qualify, it doesn't hurt to find out. Click here for our list of the best mortgage lenders and see what rates they offer. They also have lots of low down payment programs for first-time home buyers, so be sure to ask about that, as well.

2. Look for a house a little further out of the hot spots

Housing is hard to price because none of it is identical. This also means that properties with higher demand, such as those near city centers or near really great schools, are often the most expensive. I'm not saying you need to sacrifice your child's education or your fun time, but I am saying that the further away you are, the better housing deals you might find.

So what if you have to drive 30 minutes to get to the downtown of your city? How often do you go there anyway? Is it really worth the premium you'll pay to live nearby for a few hours every weekend?

Consider the distance a fair exchange for your housing costs, and look for a place that's further away from the action, but still close enough that it's not hard to pop in when you do want to be there.

3. Choose a place that's less than perfect

There's less than perfect and then there are total dumps, and there's a huge difference here. What I'm talking about is choosing a place that maybe hasn't just been repainted in Millennial Gray and might instead still have linoleum in the kitchen. As long as it's in good shape, you still have a nice place to live, even if it's not caught up to the most recent design trends.

Those trends will come and go, but your housing costs will eat you alive if you are always chasing perfection and aren't willing to take a place and make it your own. This goes doubly for buyers, who are likely to want to repaint or change the fixtures to suit their own taste, even if the house was just redone.

Ask any refinance lender about it, people want what they want. You might as well pay less every month and make the place your home -- you're gonna do it eventually anyway.

4. Consider renting out part of your home

Roommates can be a pain, but there are other ways to rent out part of your home that give you more control. For example, if you have a bedroom with a bathroom attached to it (bonus if there's an exterior door), you can set it up as a short-term rental. You may never even see your guests, and they're going to pay a lot more than a roommate would for being there less.

There are other options, too, depending on what your property has to offer. People with big fenced backyards may want to look into renting their lawn to dog owners through private dog park rental services, or if you have a pool, these are often able to be rented by the hour. If you have extra garage space, folks will often pay to store their boats, motorcycles, or other large items somewhere out of the elements.

You can take some control back over your housing costs

I was a Realtor for a long time, and it always surprises me that many people simply don't know that they have options to take control of their housing costs. You can buy a house, which fixes a lot of your housing expenses over the long term, or at least choose a home further from the action, where you aren't paying a premium to be close to noise, lights, and way too many people.

You have the ability to lower your costs. You just may have to get a little creative right now while prices continue to climb beyond the rate of inflation.

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