As the tight supply of homes for sale pushes up selling prices, it might be no surprise that most consumers are willing to overshoot their budget to buy the right house, according to a LendingTree survey.
Amid fierce competition, 64% of prospective homebuyers said they'd spend more than planned if they found the perfect house, the survey found. A quarter of respondents said they'd stick to budget and the remaining 11% weren't sure.
"I urge homebuyers to be very cautious about going over budget. Many people underestimate the maintenance costs of owning a home," Tendayi Kapfidze, chief economist at LendingTree, said in the report. "If you are stretched financially and underinvest in maintenance, it can diminish the value of your home."
Finding a home within budget currently looms as the largest stressor for consumers, with 37% of potential buyers choosing that as the worst part of the process. Finding a home in their search range because of low supply was the most stressful for 17% and 16% said trying to sell their current home.
While breaking the bank for something exceptional — especially as buyers face difficult conditions — doesn't seem too unreasonable, it could be financially short-sighted and possibly lead to future mortgage distress.