Home Prices Rose in August Despite Plunging Sales. Here's How Buyers Can Cope

If you're a prospective home buyer who's been struggling with today's real estate market, rest assured that you're not alone. Housing market conditions today can easily be described as impossible. There's very little inventory, mortgages are expensive to sign, and home prices keep on rising -- despite a massive decline in sales.

In August, the median existing home sold for $407,100, according to the National Association of Realtors. That's a 3.9% increase from a year prior. But it's also surprising seeing as how existing home sales are down 15.3% year over year.

If you're at the point where you're ready to resign yourself to renting indefinitely, try to breathe and work through your options. Housing market conditions today are far from optimal, but that doesn't mean you have to call it quits. Here are some avenues you can pursue at a time when home prices are so darn expensive and mortgage lenders aren't backing down on rates.

1. Look at up-and-coming neighborhoods

You might have your heart set on a given neighborhood because it offers tons of amenities, like access to great schools, parks, and restaurants. The problem is that at a time when home prices are up, moving to a desirable neighborhood is apt to be a very expensive prospect. But if you're willing to take a chance on a neighborhood that's currently under development, you might manage to buy a home for less.

Of course, you'll need to consider your household situation when making this choice. As neighborhoods get built up, more money tends to get pumped into local resources, like schools. But if a given neighborhood isn't there yet and you have a first-grader, that's not necessarily the best choice. However, if you have a newborn, you have more leeway to move to an up-and-coming neighborhood and see what changes transpire through the years.

2. Try to find a starter home

Starter homes aren't so easy to find these days. Many of them are getting scooped up quickly either by investors or budget-conscious buyers who are willing to sacrifice square footage if it means a more affordable mortgage.

But if you're willing to settle for a home that's a bit smaller or less updated in nature, it could allow you to get into the housing market at a time when it's so expensive. From there, you can work on building equity in your starter home so you're positioned to upsize down the line.

Of course, you may be willing to buy a starter home, but finding one may not be so easy. But if you work with a good real estate agent, they can keep close tabs on the market so you're able to jump on opportunities as they arise.

3. Look at a fixer-upper

Some people don't have the patience to deal with home repairs. But if you're willing to endure some upheaval, then a fixer-upper could be your ticket to buying a home today. A home that needs work is apt to be priced more affordably than a home that's move-in ready.

That said, before you buy a fixer-upper, it's a must to enlist the services of a contractor who can inspect that property and tell you how much money you're looking at sinking in for repairs. You don't want to land in a situation where you get a discount on your home's purchase price, but you end up busting your budget to get it into decent shape.

And if you're planning to buy a fixer-upper and renovate it yourself, think that idea through carefully. You might be extremely handy and have the best of intentions. But if you also have a full-time job, it may not be feasible to do the work yourself. So make sure you can afford to hire a professional before making an offer.

The fact that home prices are up is apt to be frustrating for buyers. But that doesn't mean all is lost. There are still options out there for buying a home today if you're tired of renting and are eager to call yourself a homeowner sooner rather than later.