Forget keeping up with the Joneses; kids these days just want to blow the Joneses out of the water.
Many consumers have spent too much on a luxury handbag, or signed on for a car payment that might require a regular phone call to Mom and Dad. But the price tag of appearing successful, wealthy, and independent has just gone up, as a new Bankrate.com survey shows that 30 million homebuyers have felt pressured to overspend on a home.
The survey also accounts for how peer pressure comes into play when shopping for things like school supplies or holiday gifts.
Ted Rossman, an industry analyst with Creditcards.com, said potential homebuyers should remember to identify costs beyond what’s posted on the “for sale” sign.
“You need to be careful not to overextend yourself, and you need to account for taxes, insurance and maintenance,” Rossman said. “But what feels like a stretch at first could become a much more reasonable monthly payment over time. That’s because your income could very well go up, and assuming you opt for a fixed-rate mortgage, that payment will remain static. So you’re insulating yourself from inflation in a way that renters are unable to do. Property taxes and construction costs generally go up over time, so factor that in, particularly if you’re planning major home improvements.”