Hot housing market: home buyers are spending more than expected

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Hot housing market: home buyers are spending more than expected

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2018 Apr 3, 2:43pm 1,750 views 3 comments

Home buyers are busting budgets — and in some cases selling things they love — to snag their dream houses.

A third of home buyers blew through the upper limit of what they planned to spend, topping that cap by an average $16,510, according to a Owners.com survey of 1,214 Americans who purchased a house within the last four years. The survey was conducted Jan. 31 to Feb. 8.

The main reason? Price. Price. Price.

“Clearly, we’re in an environment of rising prices,” especially for starter homes, says Daniel Maloney, national head of sales for Owners.com, a real estate brokerage. Many houses on the market are drawing multiple offers, forcing buyers to bid up.

Millennials are most likely to splurge, with 40% going over budget and by $24,545 on average. Thirty-four percent of Gen Xers raced past their limits, by $13,096 on average. And 19% of Baby Boomers topped their spending parameters, by an average $8,024.

MacDonald is also paying $1,600 a month in mortgage and other costs, about $400 more than she intended. To make it work, the lifelong equestrian had to sell her horse to shed roughly $700 in monthly stable fees and has given up her annual vacation to the Caribbean.

“It was tough,” she said of the horse sale. And, “It is a little disappointing to not go away as much.”

But noting that her monthly house payment is now an investment in her future, she says, “I can do without a vacation if it means I’m actually a homeowner.”