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Are More Buyers Willing To Go Over Budget?

By: Kelly Leighton on in

In today’s market, how important is a budget when it comes to buying a house?

It depends who you ask. According to a recent LendingTree survey, nearly two-thirds of buyers surveyed said they would go over budget for the perfect house. In fact, 76% of millennials, who represent the majority of first-time buyers, said they would go over budget for a home.

The top factor influencing buyers’ decision is location at 30%, while the amount of space was an important factor to 24% and a big yard, said 7% of respondents. Twenty-seven percent cited the price as the most important factor. First-time homebuyers are most concerned about budget, compared to just 31% of repeat buyers. Staying within budget is the biggest headache of homebuying, said 37%, while 17% said the limited inventory on the market right now is their biggest stressor. Sixteen percent said selling their own home was the biggest stress factor, while 10% said the mortgage application process is.

Twelve percent of buyers said their mortgage lender did not adequately explain their options, and Black and Hispanic buyers were more likely to claim that the mortgage application process was the most stressful part of homebuying.

Once they find that dream home, whether they went over budget or not, how long are buyers planning  to stay? It’s split, with 18% planning to stay less than five years, 32% planning to stay five to nine years, 18% said 10-14 years and 33% said they’re staying put for at least the next 15 years and beyond. Not surprisingly, millennials were the group most likely to stay less than 10 years, while more baby boomers and Generation X members plan to be there at least 15 years.

Buyers Still Motivated, Despite Pandemic Challenges

“Home is more important than ever before, and ownership has become a key priority for many, particularly those who have never bought a home before,” said D. Steve Boland, president of retail at Bank of America. “Owning a home has historically helped families create a legacy and enabled them to build long-term wealth.”

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Is the Pandemic Driving More People to the Suburbs?

“We see lingering effects of the coronavirus on shopping behavior and preferences. In the Northeast, especially, people are now as likely as before the pandemic to be looking for a home in a market that’s not where they currently live. However, those looking elsewhere are much more likely to be looking in smaller, nearby markets,” said realtor.com® Chief Economist Danielle Hale.

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