64% of millennials have regrets about buying their home

WED, MAY 19, 2021

Alicia Adamczyk is a money reporter for CNBC Make It, covering consumer issues, investing and digital financial communities. You can follow her on Twitter @AliciaAdamczyk.

Regrets, homeowners have a few.

In fact, 64% of millennials, ages 25 to 40, say they have at least one regret about purchasing their home, according to a new survey of more than 1,400 U.S. homeowners from Bankrate my colleague Megan Leonhardt wrote about this week. Most often: not being prepared for maintenance costs and other incidentals, the survey found.

That's not surprising. A home is the biggest purchase many people will make in their lifetime; and given how hot the market is right now — prices and demand are way up, and inventory is low — everyone buying is going to have to make some concessions.

I understand the desire to buy more space — being cooped up in a single room in my Brooklyn apartment for a full year was rough. But a house isn't something you can easily return if you got swept up in a buying frenzy. You also shouldn't cut corners, like skipping inspections or making an offer sight unseen, just to secure a property before someone else swoops in. That can lead to regrets and expensive headaches down the line.

To be clear, not everyone has buyer's remorse. Bankrate found that 57% of homeowners are perfectly content with their investment. But given the stakes, you'll want to do everything you can to minimize regret if you're in the market. Here are a few things to keep in mind (and you can read more in Leonhardt's piece).

Do the prep work

It can be tempting to rush into a purchase, especially if you live in an area where homes are going fast (that's pretty much everywhere these days). But 15% of millennials regretted the location of their new home, per Bankrate's survey.

Before you start your search, do your homework on locations you can afford, inventory in the area, unexpected costs, how the mortgage process works and so on. That includes driving around prospective neighborhoods at different times of day and viewing photos online first so that you can be strategic about which homes you visit in person.

Additionally, get preapproved for a mortgage before you even start looking. In a hot market, that could be the difference between getting a house you love and losing out to someone else. Plus, you'll have a better idea of how much you can realistically afford, hopefully preventing regret over the final sticker price.

Save, save, save

You knew it was coming. Given that the top regrets homebuyers have are unexpected maintenance costs and overpaying, you really can't save too much.

That's not to dissuade you if you don't have millions in your bank account. But you should acknowledge that there will be surprise expenses in the homebuying process. Keep in mind, your mortgage payment may look similar to your monthly rent, but that doesn't take into account insurance costs, property taxes and closing costs, which can be 2% to 5% of the total home price.

And despite historically low mortgage rates, it's still important to shop around for the best one. A difference of a few basis points in interest will save you thousands of dollars over time.

Take a breather

Homebuying, like any major financial decision, is emotional. But you don't want to get so caught up in a bidding war that you forget to perform your due diligence.

Spend some time running through your budget and don't skip the inspection just to beat out another buyer. This report will highlight potential problems and repairs you'll have to address when you own the home, making it an integral part of the buying process.

If you have to make major sacrifices, take a step back and ask yourself if this is really what you want. There's no harm in putting off such a major purchase for a few more months.

What do you want to see featured in the newsletter? Sound off by emailing me at alicia.adamczyk@nbcuni.com, or find me on Twitter, @AliciaAdamczyk. Have a friend who might appreciate this type of content? Please forward it along!