Is the housing market too pricey? A new study seems to show that most home buyers think so.
The report from Clever Real Estate, a St. Louis-based real estate firm, reveals that 64% of recent buyers planned to buy a home that cost less than $400,000, targeting a median purchase price of $310,000. That’s notable because the median home price is well above that — $416,900.
High home prices have long made purchasing a home challenging, but with added economic pressure from tariffs and inflation, finding an affordable home is now even more important to many buyers. About 62% of buyers this year said finding an affordable home was a priority — a big increase from the 48% who said the same last year.
Ironically, as most buyers competed for the most affordable homes, demand often drove up the price — making budget-friendly homes less affordable. The report notes that 62% of buyers placed a priority on finding an affordable home, but only 21% were able to get a price break from the seller.
A theme running through the study is that home buyers face steep hurdles, resulting in anxiety and regret. Almost three-quarters (73%) of first-time home buyers and 65% of all home buyers express regrets about their purchase.
According to the report 38% of buyers exceeded their initial budget when they bought a home, and 37% say they overpaid. For first-time buyers, many of whom have smaller savings, restricted budgets, and more conservative loans, the problem is more acute. About 47% exceeded their budget and 42% say they overpaid, compared with 33% and 34%, respectively, of repeat buyers.
Among all home buyers, 20% regret accepting a high interest rate, and 13% regret overspending on their home.
With high prices and interest rates, 30% of recent home buyers report feeling in over their heads financially, with first-time buyers twice as likely as repeat buyers to feel overwhelmed — 51% to 25%.
Almost one-quarter of home buyers (23%) report their finances deteriorated after the purchase, while only 19% say their finances have improved.
Among recent home buyers, 40% have been forced to make significant change to their lifestyle to make ends meet. Despite this 16% struggle to make mortgage payments on time.
About 28% of home buyers say the home-buying process was more difficult than they expected, with 36% of first-time buyers expressing that sentiment. The shortage of homes in markets across the U.S. made purchasing a home more challenging according to with 34% of buyers.
Most buyers — 94% — say they would change something about their home-buying experience if they could do it over again. However, 44% report being happier overall since purchasing their home.
