<p>As house prices continue to soar in China, understanding the implications on household finances becomes paramount for policymakers and stakeholders alike. Many individuals find themselves burdened with substantial debt, potentially leading to decreased family consumption. Scholars posit that individuals may curtail their consumption either to accumulate funds for purchasing a house or to repay their loans. Those burdened with significant mortgages are referred to as “mortgage slaves”, and this phenomenon is known as the “mortgage slave effect”. This paper employs propensity score matching (PSM) and a difference-in-differences (DID) approach to examine the effects of house purchase behavior on household consumption and savings. The findings reveal that upon purchasing houses, all types of households experience a decline in their financial assets, with risky financial assets exhibiting the most significant reduction. In contrast, household consumption generally increases post-house purchases, especially concerning essential expenditures. Spending on clothing, food, and durable goods increases to varying degrees, whereas expenditures on education and health decline. The impact of being classified as "mortgage slaves" on household consumption and savings hinges on whether the purchase has already occurred. When a family plans to buy a house, it tends to reduce consumption and increase savings. However, once the purchase has been made, savings decrease, and consumption increases. Furthermore, wealth effects also exert an influence on consumption and portfolio choices, as families tend to increase their consumption and invest more in risky assets when the value of their house rises. These findings shed light on the intricate relationship between housing purchase decisions, consumption patterns, and savings behaviors.</p>