The current cost of homeownership has a growing number of buyers regretting their decision, a recent survey said.
About 93% of homebuyers said they had regrets about purchasing a home in 2023, according to the survey by Clever Real Estate. That's an increase from 72% who said they had regrets in 2022.
Much of the regret stemmed from overspending on their home purchase, the survey said. More than half (58%) said they believed their home was overpriced, and a majority struggled to keep up with their mortgage payments, Clever reported.
Home prices have risen, compounded by a rapid increase in mortgage rates. The majority of recent buyers paid more than the national average price — over $500,000 — for their home, the survey said.
"At the start of 2022, the buyer of a $500,000 home — assuming a 20% down payment and the average rate at the time of 3.1% — was looking at a $1,700 monthly payment (excluding property taxes and insurance)," Keeping Current Matters Chief Economist George Ratiu said. "Today, the buyer of a similar-priced home is weighing a $2,500 monthly payment, a significant difference."
If you are ready to shop for the best rate on a mortgage or are considering refinancing an existing loan, visiting an online marketplace like Credible could help you compare rates, choose your loan term, and get preapproved with multiple lenders at once.
THESE TWO FACTORS COULD BE DRIVING YOUR CAR INSURANCE COSTS UP
High prices and mortgage rates aren't the only challenges facing homebuyers; a lack of housing supply has heated competition for those still in the market.
Housing inventory has slowed and is declining across the nation as sellers, feeling locked-in to their current lower mortgage rates, have listed fewer homes than last year, according to Realtor.com.
Supply for sale has dropped in 21 out of 50 of the largest metro areas compared to last year. That means that house hunters have to compete for homes, especially the most affordable properties, Realtor.com said.
Roughly 38% of homebuyers said they paid over the asking price in 2023, including 42% of first-time buyers, according to the Clever survey. New buyers were 31% more likely to pay above the asking price in 2023 compared to last year. Meanwhile, repeat buyers were only 17% more likely to do the same, Clever reported.
"This suggests that buyers who have more assets can leverage their buying power and experience to get better deals, while new buyers — who typically aim for the lowest-priced homes — may feel financially squeezed as they face more competition," Clever said.
If you are looking to purchase a home or refinance your current mortgage, comparing multiple lenders could help you get the best rate. Visit Credible to find your personalized interest rate without affecting your credit score.
MORE STUDENTS TURNING TO FEDERAL AND PRIVATE STUDENT LOANS TO FINANCE COLLEGE: SURVEY
Homebuyer sentiment fell to a record low in 2023, according to a recent Gallup survey. Only 21% of Americans said it was an ideal time to buy a house, a drop from 30% in 2022.
"Fewer Americans now than ever before believe it is a good time to buy a house," the survey said. "The past two years are the only times Gallup has found less than half of Americans endorsing a home purchase in the prevailing housing market. These bleak homebuying assessments are fairly uniform across most subgroups of Americans."
For now, the current market challenge has 28% of buyers waiting to enter the market until rates and prices drop, Clever reported. But buyers waiting for market dynamics to shift may be disappointed.
"I expect the market to remain like this over the next year," Brett Rosenthal, a Philadelphia-based real estate agent, said in a statement.
Homebuyers may find a better mortgage rate by looking at several lenders. If you are ready to shop for a mortgage loan, you can visit Credible to help you compare interest rates from multiple mortgage lenders and choose the one with the best rate for you.
HOMEBUYERS ARE FINDING BETTER DEALS IN THESE CITIES, SURVEY SAYS
Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at moneyexpert@credible.com and your question might be answered by Credible in our Money Expert column.
