House Buyer's Remorse On the Rise News & Opinion

House Buyer’s Remorse Reaching New Heights for Millennials


Maintenance Costs Top Reasons for Millennial House Buyer’s Remorse

According to a report from CNBC, Millennials are experiencing new or new-to-you house buyer’s remorse on an unprecedented level. And the reason they’re giving is jaw-dropping.

10-Second Summary

  • 63% of Millennial homeowners say they have regrets about buying
  • Roughly 44% of all homeowners say they have regrets
  • More than 57% of Millennials use social media in their home searching
  • Only 30% of Millennials visited the neighborhoods they were considering
  • Home maintenance is the biggest complaint
  • Type and location of the house enter the equation
  • Student loan debt and rising rental prices may play a part

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Regret Over Buying a House

Every generation has some level of house buyer’s remorse, but Millennial homebuyers are way ahead of the curve. While 44% of all homebuyers say they have some regrets, a staggering 63% of Millennials say they do.

Part of the problem stems from social media. There’s a pretty good chance you caught wind this article on one of our social media platforms and clicked (thanks for that!). It plays some part in most of our lives no matter what stage of life we’re in.

According to a survey from Porch, some 57% of Millennials used social media as part of their purchasing process. At least it’s just part of the process, right?

The problem is that only 30% actually visited the neighborhood to look at the homes for sale in it.

House Buyer’s Remorse Because of… Maintenance?

So you bought a house, move in, and the AC breaks down. Bad luck, right?

Something like that. The number one complaint from Millennial homebuyers is the cost of maintenance.

Wait, what? You’re telling me you bought a house and didn’t expect maintenance costs? Maybe it’s time we start teaching something that’s practically helpful in our school systems.

Bankrate analyst Deborah Kearns suggests all of us should set aside 1% of the home’s purchase price every year in anticipation of maintenance costs. That’s $4,000 per year for a $400,000 house. If you bought a new house, that will accrue into some savings. If you bought an existing house, you might need to tap into it sooner.

It’s not just things that break, though. Houses need fresh coats of paint, roof replacements, concrete cleaning, and all sorts of general maintenance to keep it looking and functioning at its best. Even your HVAC unit benefits from annual checks and preventative maintenance instead of waiting for it to break on its own.

It’s Not Just Maintenance

Some new house buyer’s remorse is more traditional. Size and location are common complaints. A common first-time homeowner mistake is just getting into more loan than you can really afford.

Student loan debt doesn’t help, either, but there’s debate about how much effect it really has. When I graduated college (I’m a year removed from the Millennial generation), my repayment terms were roughly 1% of the original balance per month over 10 years. So if everything goes according to plan, loans are paid off by the time you’re 32 years old.

With Millennials entering the homebuying process later, it seems like a perfect transition from student loan repayment to a mortgage.

But that’s not the case anymore. With skyrocketing costs, deferment programs, and post-graduate education, some student load terms go out as long as 30 years. And some of those have higher interest rates than mortgages starting with balances near the price of a starter home in rural areas.

So while a degree is likely to open doors to higher paying jobs, it’s easy to understand that leaving college with the equivalent of a 30-year mortgage can hamstring you as your family grows.

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Why Not Just Rent?

There’s mounting pressure on Millennials to buy houses. Whether it’s rising interest rates or a competitive market, even some of my coworkers get anxiety thinking about how they can shift from renting to buying.

But house rent is going up as well and that’s at least partially responsible for reducing the amount Millennials can save toward a house. It’s tough to stay in a renting situation when you’re paying as much per month as it costs to buy your own house and you have the means to make it happen.

In a culture that’s swimming in wealth compared to the majority of the world, we’re forcing Millennials to financially navigate some awfully tough waters. And we haven’t even begun to talk about their retirement.

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Dave
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Dave

“In a culture that’s swimming in wealth compared to the majority of the world…” The problem with this statement is that it’s implied that the wealth in question is enjoyed by a broad swath of the population. In truth, that wealth is hoarded by an exceedingly small number of increasingly elderly individuals. Young people today don’t have access to the same opportunities to work their way into the middle and upper-middle classes that their parents did, unless they happened to have been born into a family where the parents have already succeeded. Income inequality is higher in the US than… Read more »

Mike Tayse
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This is a political issue, so no one really wants to talk about it or solve it. When I got out of high school, 1974, I worked building houses, then driving a truck. I learned a lot and made enough money to have a car, my own apartment and eventually attend college. That is impossible for any young man these days, society has removed that possibility. Kids would work, but we’ve not really given them much incentive. ‘Ya ‘wanna make America great again? Make sure all have a living wage, then the young people can give me a decent price… Read more »

Steve Villarete
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Could this cause homebuyers to default on loans in the long term? Another housing market crash?

Brandon Hall
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The problem is older generations pushing an American dream that was very much accessible to them, on a generation of people who don’t have access to the same opportunities.

Millennials produce more, make less and have larger student debts.

Millennials didn’t get rid of vocational classes, their parents did.

Millennials aren’t ruining the world, they’re changing it, the older generations are the ones that need to adapt, pull yourselves up by your boot straps you old farts

John Riley
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Milineals want everything give to them… So of course buying a home then finding out that you must provide your own maintenance is an issue