Affordability issues lead to homebuyer's remorse

Homeownership affordability problems do not end once the consumer closes on the property, as nearly nine out of every 10 said the true cost is higher than expected, a Clever Real Estate study said.

Nearly three in five respondents, 58%, said they had buyers' remorse, and among those that bought their property in 2020 (when the pandemic-fueled boom started) or later, the regret rate was over two-thirds at 68%. Purchasers before that time, 54% said they had buyers' remorse.

The average homeowner spends $17,958 annually on expenses; if the borrower stays in the property for the entire 30-year term of a typical mortgage, that adds up to $538,740, Clever RE and its Real Estate Witch online publication found.

About 36% of homeowners believe owning their home has negatively affected their finances, with 23% stating it's negatively impacted their mental health.

Had they known the total cost ahead of time, 60% of respondents claimed they would have made a different homebuying decision.

The top two choices about what they would have done differently is that they would have purchased a property that requires less maintenance, or negotiated a better price or contingencies, both at 21%. Waiting until mortgage rates fall was cited by 14%; respondents could choose more than one response.

Those who bought a home in 2023 or 2024 were more likely to say they overpaid than those who bought before 2010, 46% to 16%. From the entire sample, about 26% of homeowners say they overpaid.

Just under half stated they are spending more money owning a home than they would have on renting, supporting some recent studies on the costs of both. Meanwhile 28% stated if they had their druthers, they would prefer to return to renting.

Nearly two-thirds of respondents had regrets about their purchase, with 15% stating their mortgage payments are too high and 13% saying their interest rate is too high; more than one answer was possible for this question.

Clever/Real Estate Witch did an online survey of 1,000 U.S. homeowners on Feb.1 and 2. Each respondent answered 25 questions.

A separate study from Redfin released on Thursday found a buyer must earn $75,849 annually to afford the typical starter home as of February, up 8.2%, or $5,767 over a year earlier.

Different data Redfin put out that same day found for all homes, the average monthly payment on a purchase for the four weeks ended March 24 was at an all-time high.

"The most affordable homes are much smaller and often require a lot of work to make them habitable — which makes them cost even more," Elijah de la Campa, senior economist at Redfin, said in a press release. "Today's most affordable homes are still hard for the average American to afford, let alone the average first-time buyer who tends to put less money down in exchange for higher monthly payments."