Maybe it’s because I’ve bought and sold many houses over the years, but I look at a house differently than most people.
You may see a dream home where you will raise your family. I see a massive, illiquid asset attached to a six-figure debt instrument that requires constant capital infusions just to keep it standing.
Both views are true. But if you let the dream side win over the debt side during the buying process, you’re headed for a harsh education.
The housing market of 2026 is unforgiving. Prices remain high, interest rates are no longer at historic lows and insurance costs are exploding across the country. There’s zero margin for error.
Yet, I see buyers making the same emotional, mathematically unsound decisions over and over again.
Here are five rookie mistakes that can turn the American dream into a financial nightmare.
1. Believing the online affordability calculator
You go to a real estate website, punch in your income and a few debts, and it spits out a number: “You can afford a $450,000 home!”
Do not believe that number. That calculator is designed to sell you a house, not secure your financial future.
Lenders use a debt-to-income (DTI) ratio to decide how much they will lend you. They’re often willing to let your total debt payments eat up 40%, sometimes even 50%, of your gross monthly income.
Think about that. Before taxes, before groceries, before gas, before saving for retirement, half your paycheck is gone.
If you max out what the lender says you can borrow, you will be house poor the day you get the keys. You’ll have a nice house, and you’ll eat ramen noodles in it for the next decade.
2. Falling for the ‘date the rate’ delusion
Real estate agents and mortgage brokers love this phrase: “Marry the house; date the rate.”
The pitch is simple: Yes, interest rates are high right now (hovering around 6% as of early 2026), making the monthly payment painful. But don’t worry! You can just refinance in a year or two when rates crash back down to 3% or 4%.
This is nothing more than gambling with hundreds of thousands of dollars.
No one knows where rates are going. They could go down. They could also stay flat for five years, or they could go up to 8%. If you buy a house you can barely afford today because you are banking on a future refinance that may never happen, you are setting yourself up for foreclosure.
Only buy a house you can comfortably afford at today’s interest rate, and shop around to ensure you are getting the best possible mortgage deal right now.
3. Ignoring holding costs
Most first-time buyers obsess over the principal and the interest payment. They forget the other two horsemen of the apocalypse: taxes and insurance.
In many parts of the country — especially Florida, California and other coastal areas — homeowners insurance premiums have doubled or tripled in the last few years. I live in South Florida, and my taxes and insurance have definitely gone up. They’re nearly as high as my entire house payment used to be back when I had a mortgage.
And when you’re house shopping, remember: Property taxes are based on the assessed value of the house. When you buy a house for a record-high price in 2026, the county or town is going to reassess that property and adjust your property tax bill accordingly.
If you don’t budget for these exploding costs, your monthly payment will shock you a year after closing.
4. Skipping specialized inspections
In a competitive market, buyers get desperate to make their offer look attractive. The easiest way to do that is to waive inspections.
A couple of years ago, a house down the canal from me sold. The buyers had a home inspection done: smart. But they didn’t get a separate inspection done on the seawall: not smart.
The result? They moved in, and a few weeks later, the seawall fell into the canal. The cost to fix it was more than $100,000. They couldn’t pay it and ended up in foreclosure. Now they don’t live there anymore.
Skipping a home inspection is a massive gamble.
A general home inspector looks at much of a home’s infrastructure. But they can’t know everything.
They may not know seawalls. They may not snake a camera down the main sewer line to see if tree roots have destroyed the pipe out to the street — a $15,000 repair. They likely don’t bring in a structural engineer to look at that crack in the foundation.
The moral of this story is to spend the extra few hundred dollars on specialized inspections for the sewer, pests and structure, especially with an older house. It’s the cheapest insurance policy you will ever buy.
5. Panic-buying because of FOMO
Inventory is still tight in 2026. You look at 10 houses, put in offers on three and get outbid every time. You get frustrated. You get tired. You get fear of missing out.
So, when the 11th house comes along — even though it’s on a busy street, needs a new roof and is at the very top of your budget — you throw in a desperate, over-asking offer just to win.
Winning a FOMO bid isn’t winning. Buying the wrong house because you are impatient is a mistake that costs tens of thousands of dollars to unwind.
Real estate is a long game. If the numbers don’t work, be willing to walk away. In my experience, sometimes the best deal you make is the one you don’t make.
