The homeownership journey has become more difficult than ever, leaving younger generations convinced that financial stability lies in renting.
Yet, according to a new survey by Clever, two-thirds of homeowners (68%) report being satisfied with their financial situation, compared to fewer than half of nonhomeowners (47%).
With mortgage costs reaching yearly highs, escrow payments climbing, and nearly every other cost-of-living metric rising, how can this be?
The answer may lie in a simple reality: Many consumers are overspending, regardless of the cost. But is overspending on a home really the answer?
The foundation of financial security
The report from Clever Real Estate reveals that half of Americans are currently living paycheck to paycheck—a situation many attribute to inflation and rising costs rather than personal habits.
While homeownership is a major financial commitment, the survey also found that 42% of homeowners live paycheck to paycheck, significantly lower than the 61% of nonhomeowners who do.
Although homeownership involves unplanned expenses, time and again it proves to be one of the best ways to build wealth and long-term financial security, which likely explains why homeowners feel more financially comfortable than nonhomeowners.
The numbers back up this up. Realtor.com® research on generational wealth found that purchasing a home by age 30 leads to a 22.5% higher net worth (+$119,000) at age 50 compared to buying in one’s 40s.
Furthermore, boomers have racked up an impressive estimated $18 trillion to $19 trillion worth of real estate—and that equity speaks volumes.
Overspending is on the rise
The survey points to reckless spending as a frequent barrier to homeownership. Yet at the same time, many who admit to it actually own a home: 49% of self-described overspenders own a home, compared to 62% of consumers who do not overspend.
That said, 10% of overall respondents have had to delay buying a home because of their spending habits.
“Overspending doesn’t just hurt the budget today, it steals from flexibility in the future,” says Evan Mills, a financial advising analyst with Scholar Financial Advising LLC. “Every dollar spent on different goods or enjoyments is a dollar that could have gone to paying down high interest debt, building up an emergency reserve, or being invested. So every dollar spent today really takes from the future.”
When people hear the word “overspending,” images of overpriced coffee and lavish travel often come to mind—and indeed, those surveyed admitted to spending too much on items like clothing, beauty, and travel.
But today, going over budget looks quite different.
No one would argue that groceries aren’t essential, and they top the list of expenses where survey respondents report spending more, with 48% admitting they’ve gone over budget at the supermarket.
The most recent monthly inflation data showed food prices increased 3.4% in July from the previous year. The food-at-home index increased 3% on an annualized basis, while food away from home jumped 2.7%.
That said, the same food that is costing more at the market is also costing more at restaurants and dining out is taking a toll: Over half of self-described overspenders (54%) eat out at least once a week.
“A lot of people don’t realize how much they spend eating out compared to eating in, or whether there’s even a difference between the two,” Mills says. “There are so many variables that having those tangible numbers really can make a difference.”
Should you overspend on a house?
If owning a home makes people feel more satisfied and many are overspending anyway, why not stretch the budget to buy a house?
After all, some 44% of middle-income renters say they earn more than their parents did at the same age, according to a survey from Neighbors Bank.
The survey collected the thoughts of 1,011 renters with a household income of $40,000 to $125,000. And yet, despite these results, these middle-income renters feel the possibility of homeownership is slipping away.
Findings from the latest NAHB/Wells Fargo Cost of Housing Index, a quarterly analysis of housing costs in the United States, paint a clear picture of the affordability challenges facing homeowners and prospective buyers today.
A family earning the nation’s median income of $106,800 now needs 36% of that income to cover the mortgage payment on a median-priced existing home ($434,900) and 34% for a new home ($410,700)—up from 32% for both in the first quarter of 2026.
This exceeds the long-held 30% income rule recommended by financial experts.
While this could be considered “overspending,” it might be the kind that benefits buyers in the long run both financially and emotionally.
“Investing in stocks and bonds in your portfolio is hopefully beneficial in the future, and your potential retirement spending increases if you invest earlier and give those investments more time to compound. But it’s not easy for somebody to show their portfolio to another person and brag about the hard work they’ve done over the past 10 years to build it up,” says Mills.
“That’s not the case with a house. It’s a tangible asset people can see, that shows you’re doing financially well or have increased happiness and stability.”
But while housing is still a solid investment, “overspending” to have one by too much should never put you in financial trouble.
“There should never be a reason for someone to try to buy a home when housing costs would consume such a high percentage of their income,” Stephen Kates, principal at Clocktower Financial Consulting, believes.
“Even at lower levels, such as 30% to 40%, housing costs can crowd out other necessary spending or limit someone’s ability to save.”
Mills agrees.
“A house can be a good investment financially. You build up equity and have a tangible asset that can provide financial flexibility in the future. But it’s really one of those investments most people make emotionally over financially, because they want an asset they can show off to family and friends,” Mills says.
“The house already comes with hidden costs, though,” he adds. “You have mortgage payments, maintenance costs, insurance. You can feel financially satisfied and then be under-saving, because so much of your cash flow is going into being a homeowner instead of saving for retirement. A mortgage bill is just the cover expense; it’s not the whole expense that comes with a house. So you have to understand the balance between overspending on a house and affording a house.”
