Buying a home has always been a big part of achieving the American Dream, but according to a new survey from Bankrate.com, nearly two-thirds of Millennials say they regret their current home purchase - more than any other age demographic.
Overall, the survey found that around 44 percent of U.S. homeowners regret purchasing a home.
The biggest issue for Millennials appears to be the hidden costs of owning a home, with nearly 20 percent of survey respondents citing unexpected maintenance bills as the primary reason for their ire. That number jumps to 25 percent among Millennials. Another survey by Bankrate last year showed that homeowners spend on average $2,000 every year on home maintenance costs. Luis Rosa, a certified financial planner in Henderson, Nevada says buying a home means you can't call a landlord to come fix any major issues.
'I always advise homebuyers to create savings buckets and open a savings account that can collect interest that's set aside specifically for housing repairs,' said Rosa.
Unexpected costs aren't the only problems millennials are encountering while owning a home. Another 12 percent of respondents cited buying a home that was too small for their needs, while another eight percent said they buying their home in bad location/neighborhood as the reason they regretted their purchase.
Still, nearly 80 percent of Americans believe that owning a home is the biggest part of achieving the "American Dream." The goal of buying a home scores ahead of retirement, having a successful career and owning a car. Mortgage rates remain low, but home prices remain high, which has prevented many Millennials out of buying a home. High rents are also preventing many from saving up for a down payment.
"Buyer's remorse can easily be avoided with adequate research and planning," Bankrate analyst, Deborah Kearns said. "Consumers should expect to set aside 1 percent of their home's purchase price each year to keep in a savings account to cover these expenses. Budgeting early on can prevent dipping into emergency savings or going into debt."
More than half of Americans who want to buy a home say they can't afford the down payment or closing costs. Millennials have also been saddled more than $1.5 trillion in student loans, making it difficult for many to afford the payments with nearly 35 percent of Millennials saying they put off buying a home thanks to their student loans.
Kearns adds that people should prepare to buy a home by saving money as soon as they can.
“You have to spend time saving up,” she says. “Not only do you have your down payment and closing costs, but then you have all the other expenses that are hidden.”
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