Millennials Have These 6 Regrets When Buying Their First Home, According To Data
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Anytime you make a major life purchase, there is always the possibility that regret about that purchase is going to set in. Whether you buy a house or a car or a new set of $1500 golf clubs, there is a good chance you will second guess that decision.
Why do you have regrets after a large purchase? There are a few reasons, and they are likely the underlying reason why Millennials have so many regrets when buying a house.
For starters, money matters to most people. If you’re not wealthy, overspending on a house (AKA being house poor) is a huge problem. Your primary residence shouldn’t require more than 28% of your monthly gross income. For instance, if your gross income per month is $10,000, then your monthly mortgage payments (e.g. principal, taxes, interest and insurance) should be no more than $2,800. If you’re exceeding that by a lot or a little, you could be in over your head if your income somehow becomes compromised or you have a big life emergency.
The second reason we regret some big purchases is because once the ink dries, they are pretty final. At least for a while. Generally speaking, you can’t turn around and sell your new house or your new car. Well, you can, but you might incur a big loss. No one wants that.
Without further ado, let’s dive into the list that was pulled together from a survey performed by Bankrate.
Regrets Millennials Have When Buying First Home
1. High Maintenance Costs
The beauty of renting is that all of the problems that arise are usually the responsibility of the person (or persons) who own the property. When you own the property, everything is on you. That includes not only all the costs of regular upkeep, but also major expenses that might come out of nowhere. Expenses like roof leaks, plumbing issues, broken boilers or water heaters, failing kitchen appliances, water in your basement… The list literally goes on.
Before purchasing a home, be sure to take these costs into consideration. Because even the simplest professional fixes will usually cost you at least $300 per visit.
So when you are calculating how much house you can afford, make sure you take all costs into consideration.
2. Bad Location
The perfect house on the wrong street.
Sometimes you can scroll through Zillow and question why a certain house is taking so long to sell. There can be any number of reasons, but save for any structural or inspection issues, the location is usually the culprit. Make sure you know if your new house is located in a noisy area, or in the flight path of the airport, or close to an area where there is lot of crime.
A bad location is almost worse than overpaying for your house. Because you can’t move your house to a new location and whatever annoys you about the location will constantly remind you of why you regret buying the house.
3. Too Much (Or Too Little) House For Them
Owning a home with enough space for your whole family is essential. You don’t want to live on top of each other. Similarly, you also don’t want to have a bunch of unused bathrooms and guest rooms that need to be cleaned regularly.
4. Mortgage Payment Is Too High
This goes back to the 28% rule. If you are owning a home above your means, you won’t have any money left over for investing or doing things you enjoy. Not only will that make you despise your house, it could also cripple your financial future.
5. Didn’t Get A Good Mortgage Rate
This is kind of an odd regret. We all want the lowest mortgage rate possible, but there are other factors at play than just buying your home when rates were higher. Like, does your credit stink?
Anyway, hopefully all the Millennial homeowners who hated their rate were able to refinance over the last year.
6. Overpaid For The Property
There are a lot of bidding wars happening in real estate right now. The market is hot (SIZZLIN’!) and people are overpaying for properties left and right. While that might not be a long term issue if you plan to stay in the house, if this is your five year home, you might not see any appreciation in the value if the market cools off. Heck, if you overpaid by a lot, you might have to take a small loss if you really need to sell.