If you’re trying to break into the housing market right now, you may find that your down payment fund isn’t going as far as you thought it would. Record-breaking rises in home prices mean the targets you set to save, say, 20% of your expected home purchase price, may no longer cut it.

Here’s what you need to know about what’s going on in the housing market and how to proceed.

Why home prices are likely rising faster than your down payment savings

It all comes down to a few factors: limited housing supply and a huge number of motivated buyers are putting pressure on housing prices. Low mortgage rates mean most buyers can afford to borrow more than they otherwise would, which is turning up the pressure even more, and inflation is pushing buying costs up for pretty much everything across the board.

Sellers are rejoicing, but for buyers (low mortgage rates aside) it can be tough terrain to navigate.

“This last year has been brutal, particularly for the first-time homebuyer market,” said Matt Woods, cofounder and CEO of SOLD.com.

» READ MORE: Supply of homes for sale around Philly is predicted to stay low for a while

Most experts agree that the pandemic has led to a tough market for buyers, but there are signs that things may finally be cooling off. At any rate, this nearly straight up trajectory for home prices seems fairly unsustainable.

“I think about my four kids. How on earth will my four kids ever be homeowners if this is the conundrum they’re dealing with?” Woods said.

What you can do if your down payment savings aren’t keeping up

There are essentially three ways you can respond if your dream home — or even a barely adequate home — is out of reach.

1. Wait out the home sale market and beef up your down payment.

Probably the easiest option — because it’s essentially passive — is to just wait for the market to cool down. Doing that can give you the opportunity to boost your savings, and you may even see home prices come down a little in your area, which means your funds will go further.

Keep in mind that there are no absolute guarantees in real estate because market conditions are always changing, but if you can’t afford to buy now, it’s probably not a good time to dive in.

» READ MORE: Trying to buy a house in the Philly region’s hot market? Prepare for battle

“The biggest thing to start with is just to make the decision on whether now is the right decision in terms of buying the home,” said Robert Heck, vice president of mortgage at Morty, an online mortgage service. “If you have flexibility and time, the options there are a bit more widespread.”

Focus your affordability calculations on your monthly expenses, not necessarily the overall sale price, he says.

Bankrate’s “how much house can I afford?” and other similar calculators can help you get started.

“This home appreciation phase is waning,” Woods said. If you choose to wait it out you can use the time to invest money in higher-yield — and, admittedly, higher risk — funds to boost your savings more quickly.

“Putting money under your mattress isn’t going to help,” he said. “If you’re parking it in the safest place, you can count on it not helping and not growing. If you’re leveraging the investment opportunities that are out there, the market’s been kind.”

Because the investment market is so hot right now, you may even be able to boost your savings quickly with some higher-risk options. But let’s be clear that money you need in one to three years is not best-suited for riskier investments. That said, if you can stand more risk, two options are:

  • Stocks, which are arguably the most traditional investment tool and can produce big yields quickly if you buy the right ones at the right time.

  • Cryptocurrency, which is kind of having a moment in the investment sphere right now. Keep in mind that crypto valuations have been a bit of a roller-coaster, so you could really boost your savings, or lose your shirt.

You should speak to a financial adviser about your investment options. Other short-term, high-yield products may be available, but you’ll want to decide what works for you with someone who really knows your situation.

2. Alter your home search punch list.

Another option is to change your housing wish list. Everyone wants to get the best possible house in the nicest and most convenient neighborhood they can afford, but if you can be a little more flexible about exactly where to land, it could help you get into a home faster and more affordably.

“The American dream is this grandiose, ’got to go own my forever home right now,’” Woods said. “My advice is starter homes are great and maybe you need to be as humble as you can possibly swallow just to get into the game.”

Being comfortable with a starter home — or agreeing to look in a broader geographical area — will open up more options and may let you look at places where your savings will perform a little better.

“Try not to get caught up in the exuberance of buying the home, chasing the offer,” Heck said. “Slowing down is important here.”

3. Tap a housing assistance program or go for a nontraditional approach.

You might be able to benefit from homebuyer assistance grants or some upstart companies that offer novel ways of getting you into a mortgage.

Woods says companies such as Unison help folks get into homes by essentially paying all-cash on their behalf and working out the mortgage once the person has moved in. Others strike up equity-sharing arrangements in which they contribute to your down payment and then take a larger percentage than a traditional lender when you eventually refinance or sell.

Plus, Woods added, you can always go the “strike a deal with your rich uncle” route, if it’s available to you.

“There are so many different paths you can go down, so try to verse yourself in as many of those as possible,” Heck said. Doing your research will help you chart the best course for your own situation.

More traditional routes for down payment assistance include:

  • FHA loans, which can be secured with as little as 3.5% down.

  • VA loans, which can be a great deal for active or retired members of the military and their families

  • Local and national first-time homebuyer programs

» READ MORE: Struggling to save for a down payment? Your county government might be able to help

Also, keep in mind that many lenders will allow you to secure a loan with less than 20% down. You may have to pay for private mortgage insurance until you build up more equity, but if you can afford the extra monthly cost you’ll still be able to get into a home if your offer is competitive.

Working with a knowledgeable real estate agent remains crucial

In this ultracompetitive market, having a knowledgeable agent as a guide is key. Most sellers receive multiple offers, many of which may be above the asking price, so it’s important to make sure you work with someone who really understands the market where you’re looking and can help you make your offer as strong as possible, even if prices are higher than you were expecting.

A good buyer’s agent will also be able to help you figure out how to tailor your search and will be able to adapt if you change what you’re looking for as you rationalize your budget.

Bottom line

With home prices being pushed up rapidly by multiple compounding factors, it’s a tough market for some buyers. But that doesn’t necessarily mean it’s impossible to buy; it just may take a little extra strategizing. Or, you could take a pause and come back when the market has cooled down a bit more.