Millennials left to buy fixer-uppers in housing market
HOUSTON - As home prices continue to rise, millennials are having to buy more fixer-uppers rather than newer homes. But some of them are having buyer's remorse because of the repair costs, according to new reports.
A new Bank of America poll finds 82% of millennials say they're more likely to buy a fixer-upper than a new home.
Meanwhile, a Bankrate survey shows 64% of millennial homeowners have some regret about buying their home.
Today's housing market is so hot, buyers are in bidding wars, driving up prices. That has millennials, who are younger and often have less money to invest, turning to older, lower-priced, fixer-uppers.
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Many projects can be budget-friendly or DIY, such as painting, landscaping, or buying appliances. But others, like remodeling a kitchen or bathroom, or installing a new roof or floor, can require professionals and thousands of dollars.
"We know a lot of Americans have renovated their homes by choice, during this pandemic experience, where they look around their house and say, you know what, these walls could use a little sprucing up," said Mark Hamrick with Bankrate.com.
A Bankrate report shows 64% of millennial homeowners have some buyer's remorse, compared to 43% for homeowners overall. 21% of those remorseful millennials cited underestimating maintenance and other hidden costs.
"This is one reason we like to have our homes inspected before we buy them," said Hamrick.
He says having a home inspected allows buyers to either budget for a repair, or ask the seller to cover it.
"If you're in the purchasing process, it's entirely reasonable to require the current owner to address that before you move in or perhaps even just nix the purchase overall," said Hamrick.
The next top regret: Bankrate found 13% of the millennial homeowners say their mortgage payments are too high, while 12% say they didn't get the best rate, compared to 6% and 7% of homeowners overall, respectively.
Home prices are expected to continue rising for a while, especially as lumber and semiconductor chip shortages continue.
Bankrate has a tool to help home buyers shop around for mortgage rates.