What Is Causing So Many Homebuyers to Lose Sleep?

The past two years, while favorable for home sellers, have been a nightmare for many Americans looking to buy a home, as evidenced by reports of fierce competition, elevated home prices, and roller-coaster mortgage interest rates. And a new study by LendingTree backs that up.

Researchers at the lending marketplace analyzed the effects of homebuying stress on people’s well-being.

They found that nearly two-thirds or 65% of Americans who have purchased a residential property in the past two years say they’ve lost sleep during the process, and more than 4 in 10 or 42% have cited homebuying as a source of family arguments. That’s compared to 34% losing shut-eye and 12% bickering with their families while undergoing the same process at least five years ago.

“Buying a house is often stressful, even in the most buyer-friendly markets,” Jacob Channel, LendingTree Senior Economist said, “and it can be even more challenging in a market as expensive and generally unfriendly as today’s is.”

Based on survey data, LendingTree authors detail some factors that make this such a stressful time for homebuyers.

The idea of overpaying in order to land the desired home is a significant contributor to anxieties, the author notes.

Those who purchased their homes in the past 24 months were almost three times as likely to pay over the asking price than those who bought at least five years ago—26% versus 9%, respectively, the survey found.

And LendingTree economists say sacrificing savings to ensure you’re the highest bidder isn’t always the smartest possible financial move.

“In some instances, offering more than asking price might be necessary to win a bidding war on a home … [yet] buyers should only offer more money if they can truly afford it,” Channel says.

If that extra incentive for the seller means being left without an emergency fund—being left “financially vulnerable”—the economist suggests not taking the risk.

Another stressful factor involves having to settle for a second choice or submit multiple offers before closing on a home.

Only 61% of recent buyers were able to close on their first home choice, compared with 73% of those who purchased their home more than five years ago. And recent buyers are more than twice as likely to have submitted multiple offers than those who purchased more than five years ago—56% versus 26%, respectively.

Buying a home sight unseen is also causing buyers anxiety, and more than half of buyers (55%) in the past two years made an offer without touring the home, a significant difference from the 18% of buyers who did so when they purchased their home more than five years ago.

The last factor mentioned in the study is the unpredictable state of mortgage rates.

“As the Federal Reserve continued to raise its key interest rate to try to curb inflation, recent homebuyers faced rising mortgage rates,” according to the LendingTree analysis. “There could be a refinance boom once rates begin to drop, as 62% who purchased in the past two years hope to refinance.”

Rest assured, none of this will stop Americans from seeking out their dream home, the research shows.

Despite market turbulence, the survey showed plenty of people are still thinking about purchasing their next house: 34% of homeowners say they plan to move sometime in the next five years, while less than a quarter (24%) report they’re in their forever home.