Smart choices can help homebuyers in this spring’s tight housing market.

Springtime means warmer temps, blooming flowers—and real estate season. But the market is different from year to year, and spring 2018 is a uniquely challenging one for buyers, especially those looking for starter homes. This is due to several factors: low inventory, higher prices, and rising interest rates.

“The spring market so far this year is crazy busy!” says Kelly Deschamp, an Illinois real estate agent. So what’s your strategy going to be for buying a home this spring? Here’s what you need to know to decide.

If you’re looking for a starter home this spring, adjust your expectations. With high demand and plenty of competition, prices are rising for starter homes to the tune of 9.6 percent more this spring than last year. Trade-up and premium homes are also more expensive this year—7.5 percent and 5.2 percent more, respectively. If you’re looking for a starter home, consider older or smaller options. Even better, look for a fixer-upper. There are 8.3 percent more fixer-upper starter homes than there were six years ago. That’s good news for anyone willing to put a little elbow grease into their investment.

Don’t get too bummed about rising prices. Compared to historical housing costs, homes today are actually more affordable than they were in past decades.

Why? Two words: mortgage rates. To take out a mortgage loan in the 1980s, you’d likely pay up to 16 percent in interest—compare that with today’s mortgage rates of around 4.5 percent. For a $200,000 loan, at 4.5 percent interest, you’d pay $1,013 a month (before taxes, insurance, and other fees), but with 16 percent interest, you’d pay $2,690.

Trulia research found that homeownership is dropping in some neighborhoods and remaining steady in others, even within the same city. Many home buyers prefer neighborhoods full of homeowners, so figuring out the character of an area is essential. Here’s a tip: Hot spots for homeownership share one attribute—increased household incomes.  Research neighborhood demographics to pinpoint median incomes and homeownership rates.

Plus, you can find out if a neighborhood is right for you with the Trulia’s new What Locals Say feature. It reveals what neighborhoods are really like, powered by the people who know them best—the locals who live there.