I thought I wanted to buy a 'dream home' but had to settle for an 'OK home' in this wild market — and I couldn't be happier about it

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  • I thought I wanted a turnkey home in a prestigious area, but a few factors made that impossible.
  • When I restructured my expectations, I found a great home that was significantly under budget.
  • Now, our low monthly mortgage payment means we can live the life we want.
  • Read more stories from Personal Finance Insider.

House prices have reached an all-time high, but with extremely low interest rates, many people have been able to afford their dream homes anyway. When my husband and I began shopping for a new house this spring, we hoped to be among them. We talked about our “forever home,” “wish list,” and “deal-breakers.” We spent hours pouring over the Notes apps on our phones, cataloging requirements ranging from minimum square footage to having a window above the kitchen sink.

This wasn’t our first home purchase. Seven years ago, we bought a fixer-upper for $113,000 and fixed it up. With the current real estate market being as seller-friendly as it is, we knew it was time to cash in, and we were right. After paying off the remainder of our mortgage, we had $130,000 at our disposal.

But while we congratulated ourselves for the solid return on investment, we weren’t interested in buying another renovation project. We envisioned a huge house in a prestigious neighborhood that required little work. I often told my husband, “I want to buy a house we love so much we’re willing to stay in it and pour money into it no matter what it does or doesn’t do for the value of our home.” In this market, that meant we were going to have to stretch our budget to its highest possible point. We could spend $360,000 on our dream house, and that was pushing it. 

I quickly realized there was no such thing as a ‘dream home’

I love interior design. I’m not a professional, but it’s a cherished hobby. I consume inordinate amounts of HGTV, Pinterest, and DIY TikTok. Projects don’t intimidate me. And during our house-hunting process, this confidence became an issue.

Despite our endless lists of deal-breakers and dream features, the charms of ready-to-go houses were lost on me. I saw large, gorgeous houses as a series of projects I’d still want to do. New-enough carpets would have to be replaced with all-wood floors, sparkling chef’s kitchens were full of honey oak cabinets I just knew I could fix with a coat of Sherwin-Williams. In other words, there was no such thing as a dream house I didn’t design myself, even at the very top of our budget.

However, we still had our inflexible deal-breakers. We refused to go under four bedrooms and three bathrooms. We also had significant preferences, such as a fifth bedroom, access to a personal or neighborhood pool, and a space for outdoor entertainment. As spring wore on, prices were rising, and reality began affecting our list. Maybe we only needed four bedrooms after all; maybe a pool of any kind was out of our price range. 

We decided to ‘settle’ instead, and soon found our home

Between my desire to renovate the most turnkey of homes and the real estate market’s efforts to thwart our dreams entirely, we found ourselves considering a new plan: settling. We still didn’t want a fixer-upper that needed the kind of work that would risk our health and safety if not addressed immediately, but if we found a house priced well enough, maybe we could settle for a house that didn’t check all the boxes on our wishlist and check those boxes ourselves. Besides, if I intended to give our new home a makeover regardless of its condition, maybe the condition didn’t matter as much as we originally thought.

With this new mindset, we found a house quickly. The house cost $290,000, but on paper, it didn’t match our phone notes at all. The house has four bedrooms and a window over the kitchen sink, but that’s about it. There is no pool, outdoor entertainment space, or third bathroom. That said, the house isn’t a fixer-upper. All the work it will need are the personal touches I want to make anyway, but the key difference between it and our dream home was its budget-friendly price tag. Not only could we afford the house, but we could also afford a pool, a patio, and a third bathroom.

We bought the house

I discovered what spending less on a house meant for our budget and lifestyle

Immediately I began wondering if we had talked ourselves into settling. Yes, the price was well below budget, but it was also well under the expectations we had for our dream home. When we bought our first house, I remember my husband and our realtor reciting, “It’s got good bones” back and forth to each other like a liturgy, but our new house was more than just “good bones” — it was a good house. But it still needed so much from us I wondered if I could live with “good enough.” 

I found my answer wandering the virtual aisles of Wayfair, talking with Sam at the local pool construction company, and looking at patio plans with my husband. A vision began forming in my mind: I could see our dream house, but I could see something else, too — I could see our dream life. A life we could afford because we weren’t sinking our equity into a hefty down payment and committing to a mortgage payment we could only afford by sacrificing the kind of daily indulgences that make life a pleasurable experience.

We’re building our dream home — and dream life

At the beginning of our house-hunting journey, when my husband and I dreamed about all the things we wanted in a home, we focused exclusively on the house because we understood that by making a $360,000 purchase, that’s all we would be able to afford for years to come. By spending $70,000 less than we planned, we can afford to dream of vacations and boats and quality furniture.

Yes, by the time we’ve added a bathroom, put in a pool, and built a patio, we will have spent most of the leftover equity from the sale of our first home, so in a way, it might seem like there’s no real difference in how much we paid for a house. The difference for us is in the monthly mortgage payment that dictates our monthly budget, which in turn controls how much we save for retirement, set aside for travel, and how often we order takeout because leftovers are gross. 

I can still see the life we spent half the spring planning. A life where we lived in a huge house in a prestigious neighborhood that made us swell with pride every time we gave out our address. But I also see the future we settled on. A future where, yes, my husband and I share a sink when we brush our teeth at night, but where we also throw pool parties in the backyard, take a handful of unforgettable vacations every year, and my husband stacks his TVs because apparently, that’s what it takes to enjoy March Madness. When I envision this future, I know we made the right choice.