Frenzied real estate market comes with regrets for most homebuyers
Multiple offers, cash offers and quick sales have created a real estate frenzy in desirable locations in Maine and across the country, leading 70% of buyers to have at least one regret, according to a national survey.
The top regret cited by about one in five U.S. buyers was underestimating the total cost of buying a home, according to a recent survey by HomeLight, an online real estate marketplace. This includes higher down payments, higher prices fueled by bidding wars, and more common things like insurance and maintenance costs.
Some rushed to buy before mortgage interest rates rose further. Rates have been below 3% for most of the past two years, but inflationary pressures have pushed them since February to a national average of 5.42% this week for a 30-year fixed mortgage, the highest rate high since April 2010.
The Federal Reserve is expected to raise interest rates by half a percentage point this week, which will push up mortgage rates and interest rates on credit cards, auto loans and other types of loans. to consumption.
About 20% of respondents said they bought a house too quickly and 40% bought an older or smaller house than originally planned.
Another 22% felt they overspent and an equal amount said they underestimated maintenance costs. HomeLight surveyed 1,620 people in the United States in January who had bought or sold a home in the past 12 months.
Homeowners should expect to spend $4,000 to $5,000 a year on general home maintenance, said Jordan Brigham, owner of Ace Handyman Services in Scarborough.
“One of the biggest challenges and surprises that people face is the cost and the time they may have to wait to complete some of these projects,” he said.
The survey didn’t break down the results for Maine, but it’s not uncommon for homebuyers to feel some sort of remorse, real estate agents said.
About a third of Maine home buyers come from out of state, with many seeking safe haven during the pandemic, according to local real estate figures. With 20% of US buyers using virtual self-guided tours, some found unpleasant and costly surprises when they finally visited their new home.
This mirrors findings from a Zillow survey in February of 2,000 homeowners who have bought in the past two years, with a third saying their new home needs more work or maintenance than expected and a similar percentage saying that they regret having bought a house that is too small.
But out-of-state buyers are also finding advantages, said Matt Lamontagne, realtor at Signature Homes in Portland. About 80% of its sales are to out-of-state buyers, who often move from more expensive states.
“Their money goes further here,” he said.