When buyers start looking for a home, one number tends to guide the entire search: the purchase price.
If you’ve been approved up to a certain amount, it’s natural to set your search parameters accordingly. But the price of a home only tells you what it costs to buy. It doesn’t necessarily tell you what it will cost to own.
Two homes with similar price tags can have very different impacts on your monthly budget. Property taxes, homeowners insurance, HOA dues, utilities, maintenance, repairs, and improvements can all change the equation. In fact, Fannie Mae has found that non-mortgage expenses can represent a significant portion of the total cost of homeownership. (Source: Fannie Mae, Housing-Related Costs Research)
That means affordability deserves a closer look.
Consider two homes in the same price range. One has a newer roof, updated mechanical systems, and little immediate work to be done. The other is priced slightly lower but may need a new HVAC system, appliances, or significant updates within the first few years. The less expensive home isn’t automatically the more affordable one.
The same thinking applies when comparing different types of properties. A condo or townhome may have a lower purchase price than a single-family home, but monthly HOA dues need to be part of the calculation. Those dues can also change over time, and buyers should understand what they cover and how the association is financially positioned. Freddie Mac specifically recommends accounting for HOA fees alongside property taxes, insurance, maintenance, and other recurring expenses when building a homebuying budget. (Source: Freddie Mac, Homeownership Costs)
Location can change the math, too. Expanding your search farther from work or the places you visit most may open the door to a lower purchase price or more square footage. But a longer commute can mean spending more on transportation and, just as importantly, more of your time getting from one place to another.
Then there are the expenses that come after closing. Moving, furniture, appliances, routine maintenance, and eventually larger repairs all require room in the budget. Freddie Mac recommends considering these costs before purchasing rather than focusing exclusively on the mortgage payment. (Source: Freddie Mac, Homebuying Budget Guide)
None of this means you necessarily need to spend less. It means the way you compare homes may need to become more complete.
A home that costs a little more upfront but requires less work, carries lower monthly expenses, or better fits your day-to-day life could make more financial sense than the home with the lower list price.
So instead of asking only, “How much home can I afford?” consider asking a slightly different question:
What can I comfortably afford to own?
Your answer may change which homes rise to the top of your list.
