The Best Way to Combat Rising Housing Costs and Achieve Homeownership: House Hacking

Here's the bottom line: if rising housing costs have you convinced that owning a home is out of reach, house hacking is the most practical, proven way I know to change that math — and Central Iowa is one of the best places in the country to do it. I'm not saying that as a theory. I got licensed in 2018 and bought my first house hack in 2020, and I've been house hacking my own properties ever since, and it's the reason I own real estate today instead of still writing rent checks.

Let me show you the numbers first, because the numbers are the whole argument.

Housing Costs Are Genuinely High — Let's Not Pretend Otherwise

I won't sugarcoat the affordability picture, because you already feel it every month:

• Roughly 65% of U.S. households can't afford a median-priced new home. Per NAHB's 2026 priced-out analysis, at a median new-home price of $413,595 and a 6% rate, about 88.2 million households are priced out of the market.
• Mortgage rates are still sitting in the mid-6s. Freddie Mac's weekly survey put the average 30-year fixed at 6.49% in early July 2026 — down from the peaks, but a long way from the 3% days.
• Nearly half of all renters are cost-burdened. Harvard's 2026 State of the Nation's Housing report counts 22.7 million renter households spending more than 30% of income on housing — 12.1 million of them spending more than half.
• Iowa prices keep climbing, just at a saner pace. The statewide median sale price reached $240,000 in early 2026, up 4.3% year over year, and here in the corridor, Ankeny's June median sale price ran $359,990 (more on the local picture in my July market update).
• Rents rise too — quietly, every year. Des Moines metro rents are up 2.9% year over year per Apartment List. That sounds small until you realize a rent increase never builds you a dollar of equity.

So the honest question isn't "are housing costs high?" They are. The question is: what's the smartest way for a regular person in the Central Iowa community to deal with it? Waiting for prices or rates to collapse isn't a plan — it's a hope. Renting indefinitely means your biggest monthly expense works for someone else's balance sheet. The right move is to make your housing payment work for you. That's house hacking.

What House Hacking Actually Is

House hacking is straightforward: you buy a property as your primary residence using owner-occupant financing — the same low-down-payment loans any first-time buyer uses — and you rent out part of it. That can be the other side of a duplex, a finished walk-out basement, or the spare bedrooms in a four-bed layout. The rental income offsets a big chunk of your monthly payment, so you get homeownership at something close to a renter's monthly cost.

It's not a loophole and it's not a get-rich-quick scheme. It's a first home and a first investment property in one purchase, done legally through loan programs that were designed for exactly this. If you want the full step-by-step playbook — the rules I live by, the tax basics, how the snowball works over time — that lives in my Central Iowa house hacking guide. This post is about the affordability case: why house hacking is the single best answer to rising housing costs I can offer a first-time buyer in 2026.

Renting vs. Waiting vs. House Hacking: The Side-by-Side Math

Let's run a realistic Central Iowa example. Say you buy a duplex in the Ankeny–Des Moines area for around $330,000 with an FHA loan, live in one side, and rent the other. Here's roughly how the monthly picture shakes out at today's mid-6% rates:

Line Item	Illustrative Number
Purchase price — Central Iowa duplex	~$330,000
FHA down payment (3.5%)	~$11,550
Total monthly payment (PITI + mortgage insurance)	~$2,700–$2,800
Rent from the other unit	~$1,300–$1,400/mo
Your net out-of-pocket housing cost	~$1,350–$1,500/mo
Renting a comparable 2-bed in the same area	~$1,300–$1,500/mo

At first glance that looks like a tie — you're paying about the same either way. But it's not a tie, and here's the analytical part that matters:

• Your payment is fixed. Rent isn't. A 30-year fixed mortgage locks your principal and interest for three decades. Rents in Des Moines rose about 2.9% last year alone. Five years from now, the renter is paying more; the house hacker is paying the same — and probably charging more rent.
• Your tenant pays down your loan every month. On this example, roughly $280–$300 of that first year's payments goes to principal — equity you keep. I call it invisible cash flow. Over five years that's in the neighborhood of $18,000–$20,000 of loan paydown, largely funded by rent.
• You capture appreciation on the whole asset. Iowa's recent ~4% annual price growth on a $330,000 property is roughly $13,000 a year of appreciation — on an $11,550 down payment. That leverage is the entire reason real estate builds first-generation wealth. The renter captures none of it.
• You get in with owner-occupant terms. A pure investor buying that same duplex typically needs 15–25% down and pays a higher rate. Living there is what unlocks the deal. That's the hack.

These are illustrative numbers, not a quote — your deal depends on price, rate, taxes, condition, and rents. But that's the shape of the math on real properties I analyze here every week. Want a deeper version of this comparison? I broke it down fully in house hacking vs. traditional buying.

The Financing Paths That Make It Work

The best-kept secret in all of this is that house hacking runs on ordinary first-time buyer financing. No commercial loans, no LLC, no 25% down:

• FHA — 3.5% down on 1–4 units. The workhorse. One note for 3–4 unit properties: FHA's self-sufficiency test requires the building's market rents to cover the full payment, which is hard to pass at today's rates. It does not apply to duplexes — one more reason duplexes and single-family setups are the practical starting point here.
• Conventional — 5% down on a single-family house hack. The most common path in our market: buy a home with a finished walk-out basement or rentable bedrooms with 5% down and skip FHA's upfront mortgage insurance premium.
• Iowa FirstHome — real state-level help. Eligible first-time buyers can pair an affordable first mortgage with a $2,500 down payment grant or a second loan up to 5% of the purchase price. 2026 income limits range from about $102,100 to $171,360 depending on county and household size.
• VA and USDA — 0% down if you qualify. VA works on 1–4 unit owner-occupied properties; USDA is worth a look on the rural edges of the metro like Polk City, Huxley, and Madrid.

Choosing between the first two is its own decision — mortgage insurance, credit tiers, and property type all factor in. I wrote a full comparison at FHA vs. conventional for a house hack. And to be clear: I'm a REALTOR®, not a lender — I'll connect you with trusted local lenders and make sure the property we're touring actually fits the program you qualify for.

The Property Types That Work in Central Iowa

Part of why this strategy works so well here is that our housing stock fits it. Three setups I see pencil most often:

1. The duplex

The classic. Full separation between you and your tenant, clean numbers, no self-sufficiency test on FHA. Inventory is thinner than single-family, so being proactive matters — I keep a running eye on duplex listings for my buyers. See the full breakdown of buying an Ankeny duplex with 3.5% down.

2. The single-family home with a walk-out basement

Central Iowa's signature house hack. A finished walk-out with a bedroom, bath, and separate entrance can rent for $1,000–$1,400 a month in the metro, and these homes are everywhere from Ankeny to Ames. You get the widest selection of any strategy and a normal single-family resale market when you're done.

3. Rent-by-the-room

A four-bedroom layout near job centers or campus — think Ames with Iowa State, or Des Moines near downtown employers and the medical campuses — can out-earn a duplex on gross rent. It's more hands-on and city rental rules apply, so go in with a system.

The renter pool behind all three is steady: Iowa State, DMACC, Principal, Hy-Vee corporate, John Deere, and the hospital systems all feed consistent demand within a short drive of the Ankeny–Ames corridor.

The Honest Part: What Can Go Wrong

I'd rather lose a sale than pretend this is passive and easy. House hacking is the best affordability tool I know, and it comes with real responsibilities:

• Vacancy happens. Budget for it — I set aside roughly 10% of rent for vacancy and another 10% for repairs, every month, before I count a dollar as savings. If a deal only works at 100% occupancy, it doesn't work.
• You're a landlord now. Screening tenants (with written permission, income verification, and strict Fair Housing compliance), handling the 10 p.m. water heater call, keeping records — it's a real job. A small one once your systems are built (mine runs about an hour a week), but real.
• You live near your tenant. For some people that's a dealbreaker. Know yourself before you buy a shared-wall property.
• The market doesn't owe you appreciation. Iowa has been steady, not spectacular — that's a feature, but plan on holding five-plus years and let time do the work. Buy the deal that survives a flat year.
• The rules are non-negotiable. Owner-occupant financing means you genuinely move in and live there — generally at least 12 months. Faking occupancy is mortgage fraud. Follow the rules and this strategy stays smooth and stress-free.

Every one of those risks is manageable with a systematic approach. None of them is a reason to keep renting forever while your housing costs climb.

Why I Can Say All This With a Straight Face

Because I've done it — and I'm still doing it. I bought my first house hack in 2020, made the early mistakes (I lost real tax deductions by not keeping receipts — learn from that one), finished basements to force appreciation, managed my own tenants, and used what those properties taught me to build both a portfolio and a career helping other people do the same. The full story, property by property, is on my house hack journey page.

That experience is the difference when we tour properties together. I'm not guessing at what a basement might rent for or what a realistic repair budget looks like — I'm comparing it against my own deals and the deals my clients are running right now across Ankeny, Ames, Johnston, Altoona, and the rest of the corridor.

Frequently Asked Questions

What is house hacking?

Buying a home as your primary residence with owner-occupant financing (as little as 3.5% down FHA or 5% conventional), then renting out part of it — a duplex unit, a finished basement, or spare bedrooms — so rental income offsets your housing payment while you build equity.

Can house hacking really offset rising housing costs?

Yes — that's exactly what it's built for. On a realistic Central Iowa duplex, the second unit's rent can cover roughly half the total payment, putting your net cost near market rent. The difference: your payment is fixed for 30 years while rents keep rising, and your tenant is paying down your loan.

How much money do I need to house hack in Iowa?

On a $330,000 duplex, FHA's 3.5% down is about $11,550 before closing costs. Conventional single-family house hacks start at 5% down, and Iowa's FirstHome program adds a $2,500 grant or a second loan up to 5% of the price for eligible first-time buyers.

Do I have to buy a duplex?

No. Walk-out basement single-family homes and rent-by-the-room four-bed layouts are the most common house hacks in Central Iowa. Triplexes and fourplexes work too, but FHA's self-sufficiency test makes 3–4 units harder to finance at today's rates.

Is house hacking risky?

It carries real responsibilities — vacancy, repairs, tenant screening, living near your rental. Manage them systematically: reserve 10% of rent for repairs and 10% for vacancy, screen carefully with full Fair Housing compliance, and only buy deals that still work if the unit sits empty a month or two a year.

Do Iowa first-time buyer programs work with house hacking?

Often, yes — FirstHome works with owner-occupied purchases, with 2026 income limits from roughly $102,100 to $171,360 by county and household size. Rules vary by property type, so confirm eligibility with an Iowa Finance Authority participating lender first.

Bottom Line

Rising housing costs are real, and waiting them out is not a strategy. House hacking turns the problem on its head: instead of your housing payment being the thing that keeps you from building wealth, it becomes the thing that builds it. You get in with a first-time buyer's down payment, a tenant helps carry the mortgage, your payment stays fixed while rents rise, and every month moves equity from the bank's column to yours.

The right move is to find out what this looks like with your numbers — your savings, your income, your timeline. Two ways to start, both free and no-pressure:

1. Take the two-minute House Hack Score quiz — it tells you how ready you are and what to work on next.
2. Grab the free Central Iowa House Hacking Field Guide — 18 pages of FHA strategy, deal-analysis worksheets, and the neighborhoods where the numbers actually pencil.

And whenever you're ready to talk through a real property — or just gut-check whether this fits your situation — I'm a call or text away.

Jackson Krile is a residential and investment real estate specialist with the Flanders Team at RE/MAX Real Estate Center, serving Central Iowa including Ankeny, Ames, Johnston, Urbandale, Altoona, Waukee, and 20+ surrounding communities. Licensed since 2018, he bought his first house hack in 2020 and has house hacked his own properties ever since. Educational only — not lending, legal, or tax advice. Data: NAHB/Eye on Housing (Feb 2026 priced-out estimates), Harvard JCHS State of the Nation's Housing 2026, Freddie Mac PMMS (July 2026), Redfin Iowa/Des Moines market data (2026), Apartment List Des Moines Rent Report (July 2026), Iowa Economic Development & Finance Authority FirstHome program, MortgageResearch.com FHA self-sufficiency guidance. Example deal figures are illustrative estimates, not quotes or guarantees.