Homebuyers overwhelmed by mortgage payments, survey finds

High prices, rising rates, and unexpected costs push buyers to the edge

Homebuyers overwhelmed by mortgage payments, survey finds

A growing number of recent homebuyers are finding it difficult to keep up with their mortgage payments and maintain their lifestyles after purchasing a home, according to a new survey from Clever Real Estate.

The survey found that 44% of new homeowners have taken on extra debt since buying, while 43% have struggled to make their mortgage payments on time.

“As peak homebuying season begins, American home shoppers are still contending with perennial problems, such as high home prices, rising mortgage rates, and low housing stock,” Clever wrote in the report. “But this year, buyers must also grapple with changes to the real estate commission model that has governed how homes are bought and sold for decades.”

About 38% of homebuyers in 2023 and 2024 admitted to overpaying for their homes, with 23% regretting their decision. Additionally, 50% of respondents accepted a higher interest rate than planned to secure a mortgage.

Nearly 47% of recent home buyers feel financially overextended since purchasing their homes. While 77% of prospective buyers have started saving for a down payment, 59% report feeling financially overwhelmed by the process.

For more than half of the respondents (52%), the overall home-buying experience proved more stressful than anticipated – a sobering reality check on the American dream of homeownership.

Compromises and regrets

Compromise has become the norm, with a staggering 85% of buyers settling for less than their desired home. Price was the biggest sacrifice, with over one-third (37%) purchasing homes that exceeded their budget.

Perhaps unsurprisingly, 82% express at least one regret about the homebuying process. Excessive maintenance needs topped the list at 28%, with over a third (35%) attributing this to sellers' lack of transparency, according to the report.

Cosmetic improvements like updated kitchens and bathrooms (33%) take precedence over structural integrity (24%) for future buyers.

Commission conundrum

As if the challenges weren't daunting enough, a potential overhaul of commission structures looms.

A previous Clever survey found that 94% of home sellers supported having buyers pay their agent's commission. However, in this latest survey, only 61% of buyers agreed, with half (50%) considering forgoing an agent altogether due to the changes.

Buyers said they would lower their home-buying budget by an average of $13,167 if they had to pay their agent's commission.

Read next: How will upcoming NAR changes affect mortgage professionals?

“After years of litigation, the National Association of Realtors has agreed to changes that are expected to shift payment of the buyer's agent commission from the seller to the buyer this August,” the report said. “Although this could reduce overall commission costs in the long run, it immediately adds an extra expense to buyers already struggling to afford homes.”

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