Associated Press

Steven Senne

Millennials are in peak nesting mode. We want the outdoor space many apartments lack, or the room to grow that a starter house doesn’t offer. There’s just a not-so-small problem.

(Gestures broadly at everything.)

The median existing home sales price of U.S. homes was $389,500 in August, according to the National Association of Realtors. The average interest rate for 30-year fixed-rate mortgages topped 6% as of Sept. 15 this year, according to Freddie Mac.

It can be hard to compete when an open house feels like a cage match. It’s enough to make anyone retreat to a rental. “We’re seeing that those who were thinking of buying a home just aren’t interested anymore,” says Natalie Slagle, a certified financial planner. “People aren’t as willing to make big financial moves when it feels like there’s uncertainty.”

Though you may feel stuck right now, you don’t have to be forever. Here’s what to do in the meantime.

Reevaluate your current situation

In slowing down your house hunt, you’ve given yourself the gift of extra time. You can reassess what’s realistic. Over the next year or so, your list of must-haves for a home might need a few edits.

When Jason Fletcher was looking to buy his first home in Orange County, California, in 2019, he was single. At the time, he didn’t find the right house, but it wasn’t long before he met his now-wife. They’re currently expecting their second child and still hoping to swap their rental for a home they own, one quite different from what Fletcher searched for three years ago.

However, their search is coming up short. “We have not seen inventory increase a whole lot,” he says.

Amanda Astey moved to San Francisco with her husband seven years ago. They considered buying a home after living in the city for two years, but backed out after they were unable to find anything in their price range. Now, they’ve advanced in their careers.

They’re open to living farther from the city — and even to leaving the state in search of more space for the money. “We’ve had a huge exodus of friends to Portland ... and to Denver,” she says. “It’s seeming more and more likely that another city would be our best option.”

Become an attractive buyer

If your budget and mortgage preapproval were so-so this time around, take the next few months to beef up your finances so you’re in a stronger position.

Start with discretionary spending. If you can cut back, and possibly increase your income with a promotion, job or freelance work, you can add to your savings and be prepared to make a larger down payment. You may also be able to increase your overall budget for a home. Fletcher and his wife cut back on buying new clothes and are keeping their paid-off cars longer to avoid car loans.

Paying down existing debts will lower your debt-to-income ratio.

A higher credit score can help you qualify for better mortgage terms, hopefully ensuring you can get as low an interest rate as possible.

Adjust your interest rate expectations

Sometimes your life plans don’t line up with economic conditions, so you may not be able to wait indefinitely for interest rates to go down (assuming they will). If interest rates go lower in the future, you can refinance. You may have to make some concessions to accommodate a more expensive loan, like reducing your overall budget or widening your search.

Real estate agent Phil Lawson notes that even now interest rates are low, historically. When he bought his first home 20 years ago, he paid 7.6%.

“This is a stupid cliche, and I’ve said it over the years,” he says. “Marry the house but date the rate.”

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Sara Rathner is a writer at NerdWallet.