Thanks everyone! I completely agree that I would rather be putting the amount we pay in rent towards a mortgage, but I am scared we will never be able to afford a house! We are 20 somethings with student loans and a car payment and while we have money saved, it is definitely not a lot. Both rent (especially since we have a dog) and houses are pretty expensive where we live, so I guess I'll just have to see how it goes with the bank!
Take your time, look around. Being motivated will help you save.
Be realistic about where you want to live. It may not be your ideal location, but should be somewhere that will work for you, where you can be relatively happy
Find a house that has good bones, is in relatively good repair, and is in a decent school district. Don't worry too much about cosmetic things, those you can change fairly easily in many cases. (Sometimes older people retire and sell, and though some of their decorating may be outdated, they've taken good care of the house and raised their families there, etc. Think good vibes!)
Ideally look for something with three bedrooms and two baths or even a bath and a half. That way if you're there longer than expected (as we were; still in first house!), you can stay even if you start a family some day. And storage. Closets and storage. Some outdoor living space is nice, too, like a deck, patio, or screened porch, which can help make a small house feel larger, at least in good weather!
I will never forget the feeling of buying our first home. I loved the house from the time I saw it! Someone else had recently done some big things (like replaced the roof, furnace and hot water heater) as well as done some bright cosmetics, and I loved what she'd done. The house was super clean and just had a really good feel to it. It was completely empty when we moved in, and I remember going straight from the lawyer's office after signing all the papers, to the house, and sitting eating a pizza on the living room floor, lol. That's actually one of my fondest memories ever.
But I also remember too, being worried about whether we could afford it. We were in a similar position to you, with student loans and paying a very high interest rate, as well as PMI for a while, too. But we made it work, month after month, year after year. (Hey, you have to live somewhere, right?) In a way, that's why we stayed put. We didn't want to go any higher (and our area is high to begin with; keeping things affordable allowed me to work part time while my kids were growing up). Later, we added an In-Law suite, a sunroom, did a major kitchen renovation, and added some great outdoor living spaces. (We have a perfect yard for dogs, too.)
One day we had a yard sale and a former owner stopped by. I knew she loved the house because previously her husband and daughter had stopped by on Halloween and pointed out a tree in the yard they'd planted together when she was a youngster. She came in and started to cry - happy tears. She said she was remembering when her three kids used to have their nightly baths, then come down and sit by the wood stove. (And I thought, hmm, I KNEW this house had good vibes! Lol.) It was so sweet; I think I got teary, too! I can't imagine being in a house you hate for any length of time. So my best advice is to take your time and find a house that you really connect with, even if it's not your ideal right now. You'll probably be there for quite a few years and there will be plenty of time to make it your own, for however long you decide to stay.