Home Purchase Questionability: One Quarter of Homebuyers End Up Financially Worst After Their Buy
A 2023 study by Clever Real Estate has shed light on the experiences and concerns of home buyers in the current housing market. The research reveals that affordability and mortgage rates are the main areas of concern for many buyers.
The study found that nearly two-thirds of Americans who bought a home since 2023 have expressed regrets about their purchase, with the number being higher among first-time buyers (73%). The primary reason for these regrets is financial, with 20% of buyers regretting a high mortgage rate and 13% regretting the price they paid.
Buyers also reported underestimating the total ownership costs beyond just the mortgage, such as taxes and maintenance, which have added to their financial strain. To avoid these pitfalls, experts recommend getting mortgage pre-approval and comparing lender offers to ensure a more informed decision and avoid overpaying or stretching budgets too thin.
However, the study also presents a nuanced view of homeownership as a blend of everyday stress and long-term rewards. Despite the regrets, 87% of home buyers are happy they purchased their home when they did. In fact, 46% report an improvement in their overall quality of life, and 53% are more satisfied with their living space.
Agent Melissa Young of Charlotte, North Carolina, stated that the biggest challenge many of her buyers face is decision paralysis. She explained that buyers often have a hard time making a choice, which can lead to them purchasing a home that is significantly different than what they originally wanted.
In Philadelphia, high rates and high prices are the main issues, according to a real estate agent based in the city. Despite these challenges, 28% of buyers reported experiencing second thoughts immediately after their offer was accepted, and a fifth of buyers reported that their stress levels have worsened since becoming homeowners.
However, some agents believe that the current market offers distinct advantages, such as negotiating seller concessions for closing costs, rate buydowns, or repairs. This can help buyers to mitigate some of the financial strain associated with homeownership.
Overall, the study highlights the importance of being well-informed about budgeting and mortgage options to make smarter, more confident homebuying decisions and avoid regrets related to financial strain.
- To mitigate the financial strain associated with homeownership, buyers should consider negotiating seller concessions for closing costs, rate buydowns, or repairs, as suggested by some agents.
- The study reveals that beyond just the mortgage, buyers often underestimate the total ownership costs such as taxes and maintenance, adding to their financial strain.
- The study found that a significant number of home buyers, particularly first-time buyers, have regretted their purchases due to financial reasons, with high mortgage rates and the price paid being the primary concerns.
