Homebuyers aren’t just stretching to get into homes — they’re straining to stay there.
That’s one of the clearest takeaways from the newly released ServiceLink 2026 State of Homebuying Report, which finds today’s buyers are increasingly over budget, financially stressed, and navigating the process with uneven understanding, even as they demand more speed, simplicity, and digital control.
Based on surveys of more than 1,500 recent homebuyers and over 500 loan officers, the report paints a picture of a borrower who is “stressed out, time-strapped, inventive, and digitally fluent,” while also craving affordability, transparency, and stability throughout the process.
Buyers Are Overspending And Feeling It
More than seven in 10 buyers who purchased a home in the past two years exceeded their original budget, according to the report. Of those, 22% went $50,000 to $79,999 over, while 10% exceeded their budget by $80,000 or more.
That financial strain is showing up in borrower stability. Half of Gen Z respondents and 44% of millennial respondents said they were at risk of missing at least one mortgage payment over the last two years. About 14% of Gen Z and 15% of millennials said they faced that risk between six and 10 times during that period.
Compromises Everywhere — Except For Pets
Even after stretching budgets, buyers are still making trade-offs.
About 21% said they purchased a home with a smaller yard than they wanted, and another 21% said they settled for fewer bedrooms than desired.
Many are also getting creative to close deals. While 77% used cash or savings for down payments, others tapped retirement funds, relied on gifts, or borrowed from family and friends.
One area where buyers refused to compromise: their pets.
Roughly nine in 10 homeowners said they considered their pets’ needs when purchasing a home. That translated into decisions like buying homes with fenced-in yards (54%), in walkable communities (38%), or with more space overall (37%).
Knowledge Gaps Persist
A key disconnect is emerging between what borrowers believe they understand and what loan officers are seeing in practice.
While 67% of homebuyers said they fully understand property taxes, only 48% of loan officers believe that’s the case. Similarly, 60% of buyers said they understand realtor fees, compared to just 37% of loan officers who agree.
Borrowers themselves are calling for clearer communication, simpler paperwork, and more transparency around fees and timelines, according to survey responses.
Digital Expectations Are Rising
Technology is playing an increasingly important role in how borrowers choose lenders.
Nearly nine in 10 respondents said the ability to eSign some or all closing documents would influence their decision. Another 87% said they value the ability to self-schedule key steps like appraisals or closings, while 82% said they would be more likely to choose a lender offering virtual closings.
At the same time, borrowers still rely heavily on human guidance. Real estate agents, family, and friends remain the top sources of advice, ahead of social media and AI tools.
What It Means For LOs
Today’s borrower is walking a tightrope — stretching financially to win deals while navigating a process they don’t fully understand.
The data points to a more fragile borrower profile: buyers are exceeding budgets, taking on larger mortgages, and, in many cases, coming close to missing payments. At the same time, loan officers themselves say affordability and overextension are among their top concerns in the current market.
That creates real implications for originators. Deals may be harder to qualify, more sensitive to rate changes, and more likely to fall apart without clear guidance upfront.
At the same time, a clear opportunity is emerging.
Borrowers are actively asking for more transparency, simpler explanations, and better communication, even as many overestimate their understanding of key costs like taxes and fees.
Layer in rising expectations for digital tools, from eSignings to self-scheduling and virtual closings, and the competitive landscape becomes clearer: the lenders who can combine speed, simplicity, and human guidance are best positioned to win.
