Most Buyers Are Willing to Blow Their Budget on a Home

August 25, 2020

Sixty-four percent of more than 1,000 home buyers recently surveyed say they are willing to go over budget for their perfect house. That sentiment is particularly strong for millennials—76% of millennials say they’re willing to pay more for a home, according to a recent LendingTree survey.

Record low mortgage rates—at less than 3% in recent weeks—may be giving some home buyers a false sense of security about how much more they can truly afford.

“Overpaying is one of the downsides of very low interest rates,” says Tendayi Kapfidze, LendingTree’s chief economist. “Coupled with tight inventory in some areas, it increases the risk of bidding wars over asking price.”

Home buyers may be coming to terms with the realities of the housing market—low inventories of homes for sale have put them up against increased competition for a limited number of homes. Forty-eight percent of first-time home buyers say they're most stressed about finding a home within their budget. And about one in six buyers say they're worried about finding a home because of the low housing inventory in their area, according to the LendingTree survey.