How to Avoid Homebuyer's Remorse

If you’re a homeowner, there’s a 25 percent chance that you wish you hadn’t bought your current home.

That’s according to a survey conducted by the real estate brokerage Redfin. They found that 1 out of every 4 homeowners wouldn't have bought the house they currently own if they had the opportunity to go back and do it again.

There are a lot of reasons why people come to eventually regret purchasing their home. Sometimes they find that they don’t love the neighborhood like they thought they would. Sometimes the house comes with more maintenance and upkeep issues than they had anticipated. Sometimes the house simply isn’t big enough.

One of the biggest differences, however, appears to be financial capacity. Of current homeowners with a combined household income above $100,000, only 13% are remorseful of their purchase. Of those with a total income below $100,000, however, nearly one-third wish they hadn’t purchased their current home.

4 Ways to avoid homebuyer's remorse

Keep it in budget

Your total housing costs shouldn’t exceed one-third of your total budget. That figure is meaningless, however, if you don’t really understand what your budget is. Do a thorough accounting of finances and understand what your capabilities are – not just now, but in the foreseeable future. A lot can change over the course of a 30 year mortgage, but that payment will always be there.

Think ahead

What does the future look like? It’s impossible to be certain, but you can probably make some fairly accurate guesses based on your goals and current trajectory. A house that’s right for today might not be right for five years from now. That’s okay, as long as you’ve made peace with the fact that you’re going to have to go through the entire home buying process again in the near future. A better plan is to find a house that fits your projected needs.

Do your homework

Terrible pun aside, you can’t skimp on the research when it comes to investing in your home. Spend time and get a feel for the neighborhood – it’s going to a critical part of your living experience. Don’t skip the inspection, and don’t underestimate the cost of maintenance. The more work you do ahead of the purchase the less stress you’ll experience after the paperwork is signed.

Get educated

Owning a home can be complicated business. Being a successful homeowner requires more than just the ability to get a reasonable loan. Here at MMI we offer homeowner educational seminars, in-person and online. It’s a great way to learn what it takes to buy and maintain a home. Check out our list of upcoming workshops. Even if homeownership isn’t in your immediate future, the more you know now, the more you’ll be ready when the opportunity presents itself.

Homeownership is a big deal, and it’s usually a goal folks work years towards achieving. So don’t let homeownership become a nightmare. Do the work and find a house that fits your personality and your goals – something you’ll love today and 30 years from now.

Article updated August 2020

Tagged in Mortgages and foreclosure, Psychology and money, Goal setting

Jesse Campbell is the Content Manager at MMI, focused on creating and delivering valuable educational materials that help families through everyday and extraordinary financial challenges.

  • The Consumer Federation of America (CFA) is an association of nonprofit consumer organizations that was established in 1968 to advance the consumer interest through research, advocacy, and education. Today, nearly 300 of these groups participate in the federation and govern it through their representatives on the organization's Board of Directors.

  • Since 2007, the Homeownership Preservation Foundation (HPF) has served as a trusted, neutral source of information for more than eight million homeowners. They are partnered with, and endorsed by, numerous major government agencies, including the U.S. Department of Housing and Urban Development and the Department of the Treasury.

  • The mission of the U.S. Department of Housing and Urban Development (HUD) is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD works to strengthen the housing market in order to bolster the economy and protect consumers; meet the need for quality affordable rental homes; utilize housing as a platform for improving quality of life; and build inclusive and sustainable communities free from discrimination.

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  • The National Foundation for Credit Counseling® (NFCC®), founded in 1951, is the nation’s largest and longest-serving nonprofit financial counseling organization. The NFCC’s mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services.