With rising home prices and inventory at a 12-year low, house hunters are increasingly eager to pounce on promising properties. But while that might give them an upper hand when it comes to beating out more wishy-washy competition, it could also result in serious buyers remorse.
More than half of Americans have at least one regret when it comes to buying or renting a home, according to real estate information site Trulia, which surveyed more than 2000 adults about their housing choices.
The top regret among current homeowners was not purchasing a large enough home, with 34 percent of those surveyed wishing they would have opted for more square footage over other perks such as location or decor updates, the survey showed. Another 27 percent wished they had put more sweat equity into their homes by remodeling and updating key rooms, and almost a quarter of homeowners surveyed said they wished they had more information about their future abode before they signed the deed.
"Although the recession, tight credit, and foreclosures lowered homeownership in America, people would still buy – and buy big – if they could," Jed Kolko, Trulia's chief economist, said in a release. "Even after the housing crisis, Americans' main housing regrets are that they didn't invest more in their homes."
Financial regrets also figured into homeowners' hindsight towards their purchase. Almost 20 percent wished they'd saved up more for a larger down payment, and 16 percent said they wish they would have been more financially secure before making such a large purchase.
While homeowners have a fair share of regrets when it comes to their home purchases, buyers' overall remorse is abating. About 55 percent of those who bought a home between 2010 and 2013 have regrets, compared to 63 percent who bought between 2003 to 2009. Record affordability, low mortgage rates, and conservative bank lending could have played a role in helping consumers steer clear of less-than-ideal investments, but that could change given the real estate landscape becoming ultra-competitive in recent months.
"People want to buy and rental vacancies are very low," says Kolko. "That means they'll be in a rush and could make mistakes they'll later regret."
But the feeling of botching a big decision isn't confined to the homeowner set. Renters, too, have regrets, the top one being missing the opportunity to buy a home during the recent period of record affordability. More than 40 percent of current renters wish they had purchased a home rather than renewed a lease, the survey found. Like homeowners, almost 40 percent wish they had more space and another 20 percent wish they'd selected a rental closer to their job to cut down on commute time.
Age-wise, millennials were much more likely to have housing regrets than baby boomers the survey found, with almost three-quarters of respondents aged 18 to 34 having second thoughts about their housing decisions, versus just 35 percent of those 55 and older.
Still, the specter of making a bad move when it comes to housing decisions isn't likely to deter many would-be buyers. Thanks to rising home prices and the potential for interest rates to creep up, 75 percent of Americans say it's better to buy a home now than a year from now. Things are a bit different on the seller side – the same rising home prices are keeping sellers on the sidelines, waiting for more gains before they put the "For Sale" sign in the front yard.
"The inventory crunch will continue," Kolko says. "The housing bottom was recent enough that people are still hesitant to put their homes on the market."