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They have their reasons, and they’re valid ones.
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Buying a home in 2022 was no easy feat. Not only was real estate inventory limited, but mortgage rates rose sharply last year compared to where they sat in 2021. In fact, by the end of 2022, borrowers were looking at mortgage rates that were twice as high as what they would’ve paid a year prior.
In spite of that, many people did manage to purchase a home in 2022. But according to a new report by Hippo, 78% of those who did wound up having regrets. Here are some of the reasons why.
1. Too much of an expense
For 49% of respondents, homeownership has been more expensive than they expected it to be. Most home buyers know to anticipate expenses like mortgage payments, homeowners insurance, and property taxes. But many don’t realize how expensive it can be to maintain a home.
As a general rule, maintenance can cost anywhere from 1% to 4% of a home’s value. So if you’re buying a $400,000 home, budget at least $4,000 a year for upkeep. And if that home is older, you may want to budget closer to $12,000 to $16,000 a year.
2. Too many unexpected issues
Unexpected issues have left 47% of respondents regretting their decision to make a home purchase. The reality is that even if you hire an experienced home inspector before closing on a home purchase, you could still get stuck with hidden issues. That’s why it’s so important to go into homeownership with a solid emergency fund. That way, sudden repairs don’t have to cause the same level of financial stress.
3. Too much work
Home maintenance isn’t just expensive. It can also be time-consuming. And so 47% of respondents point to it as the reason they regret buying their homes.
It’s important to be realistic about property maintenance. And if you know your schedule doesn’t have much wiggle room, you’ll need to pad your maintenance budget to allow yourself the option to outsource a lot of your home’s upkeep.
4. Too many compromises
The housing market has lacked inventory in a serious way these past few years. That’s forced many buyers to settle for a home that may not have checked off all the right boxes.
A good 46% of respondents who regret homeownership say they compromised on things they really wanted for their home. To avoid similar regrets, order your wishlist by priority when you’re in the process of searching for a home. If there are 12 items on your list, and item No. 1 is the most important, don’t budge on it. But if you can’t get items 11 and 12, that’s a different story.
The last thing you want to do is buy a home only to lament your decision afterward. By budgeting for maintenance from both a financial and time-related perspective, boosting your emergency fund, and knowing what not to settle for, you can avoid landing in the same position as the 78% of people who wish they wouldn’t have purchased a home in 2022.
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