In this hot real estate market, competition for homes often leads to quick purchases that can even lead to buyer’s remorse.
according to a Recent Bankrate SurveyOf course, 64% of millennials aged 25 to 40 are experiencing remorse after buying a home, compared to 33% of baby boomers aged 57 to 75. The survey found that the older the buyer, the less likely the homebuyer is to have remorse.
One factor that may explain this division is frustration; Younger homebuyers are more likely to participate in purchases that can settle them for properties that may not be to their liking.
Factoring in the pandemic, the survey found that homebuyer remorse among millennials primarily fell into two categories: financial and physical.
Financial regrets among home buyers
About 21% of homebuyers listed high maintenance costs as their biggest regret, and that number jumps to 26% among young millennials aged 25 to 31. Maintenance refers to anything in the home that breaks down and needs to be fixed or replaced.
Bankrate senior economist analyst Mark Hamrick explained that since home prices are rising nationally, people have less flexibility with their finances, and the only way to mitigate this is to avoid paying too much or having a substantial emergency. Save.
“The No. 1 financial regret among Americans is that they wish they had emergency savings,” Hamrick said. “You know, you look around the house and it’s just a series of things waiting to break down.”
Homebuyers should also shop with their eyes open, assuming maintenance will be required. According to Jeff Harris, a professor in the department of finance and real estate at American University, older homes may need updated appliances.
About 13% of homebuyers listed high mortgage payments as another concern, and 12% of homebuyers were unhappy with mortgage costs.
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“There are at least some people who don’t do enough homework, and so, you know, we always say it pays to shop around for the best rates and do extra homework,” Hamrick said.
Given the low interest rates nowadays, the cost burden among millennial homeowners is due to a higher-than-expected price tag for their homes, according to Hyojung Lee, assistant professor of housing and property management at Virginia Tech.
“Exactly obtaining and comparing rates between lenders is cumbersome and time-consuming, but it is important because it will determine how much you will pay over the next several years, if not decades,” Lee said.
Finally, about 13% of homebuyers listed overpayment as one of their concerns, and 9% of homebuyers didn’t think their home was a good investment.
“The best way to avoid overpaying is to have a home inspected prior to purchase – these inspections can uncover electrical problems, heating and cooling problems, termite issues, radon problems and many other hidden issues that can easily may not be clear to the untrained eye,” Harris said.
Location among home buyers regret
According to the survey, about 15% of homeowners listed a poor location as their regret for buying a home. Location can mean different things to different people, and some of these variables can include proximity to good schools, restaurants, cafes or parks, or even an issue with safety in the neighborhood. .
“The problem is that when there’s huge demand and limited supply, there’s more and more mismatch between the two so that people aren’t happy with what they got. This can be problematic because you can’t easily change your neighborhood.” ,” said Lee.
Inexpensive homes also tend to be in less attractive locations. Since Millennials and younger homebuyers are more likely to be on a smaller budget than older, more established buyers, Millennials are more likely to buy these cheap homes that may be suffering from a location problem.
“If a new buyer can only afford a subs, the home can still offer value if the buyer maintains the home well, makes consistent payments to build equity over time, and decides to upgrade or move to a more expensive location over time,” Harris said.
The survey also found that 14% of millennials said their house was too big, and the same percentage said their house was too small. According to Hamrick, people were not entirely happy living in multi-family units during the pandemic.
“We saw a solid increase in single family home purchases, where people were essentially looking for more space that could be separated from other families, but also had enough space in the home to work from home, Including children studying from home,” Hamrick said.