More and more millennials regret buying their first home

• 82% of millennials regret something about buying their first home, per a new survey.
• Those who rushed to buy were more likely to have buyer's remorse, and most regretted their location.

Buyer's remorse is real.

Just ask millennial homeowners, the majority of whom regret buying their first home. So finds a new survey by real estate education platform Clever Real Estate that polled 1,000 people about their homebuying plans. Of the millennials who already own a home, 82% have at least one significant regret about their home purchase.

That's more than the 64% of millennials who said they regretted buying their homes in a Bankrate survey from last June that surveyed more than 1,400 homeowners.

It's a consequence of shopping in today's housing market, which is filled with more aspiring homebuyers than homes. The pandemic, a historic lumber shortage, and an under building of homes since the Great Recession were no match for demand in a remote-work era. As the national median price of a house climbed to record highs, competition heated up with all-cash bids and higher down payments. With the pressure on to snap up the rare house that was both available and affordable, some buyers didn't realize they were making a hasty decision until it was too late.

Those who rushed to buy were more likely to experience financial remorse, the Clever Real Estate survey found. One in four millennials said their home value decreased while the same amount said that their mortgage was expensive.

Since buyers often had to shell out more than the asking price to outdo competition, many are realizing they overpaid. The survey found that one in six millennials would offer at least $100,000 above asking price for their dream home. Nearly half of millennials anticipate maxing out their budgets to buy a home, with one-third planning to spend more than the median US home price of $405,000 at the time of the survey in November.

Consider 28-year-old aspiring homebuyer Ashley Nader, who previously told Insider she originally wanted to buy a house in Florida under $400,000 so she could pay it off in 10 or 15 years. The lack of starter homes caused her to increase her budget by $200,000.

But she refuses to put in an offer over asking price so she can avoid buyer's remorse. "I don't want to play that game," she said.

The search for affordability has also led to homebuying regret. According to the survey, millennials' biggest regret (40%) is buying a home in a bad location. Nearly half of millennials expanded their search location when house hunting; it's likely that they ended up buying in a more budget-friendly area that wasn't their first choice.

Some millennials are turning to fixer-uppers as a more affordable option — 82% said they'd buy a house that needs significant repairs, more than the 67% of millennials who said the same in 2019.

The findings echo Bank of America's sixth annual millennial home-improvement survey from last year that found more millennials were taking out significant loans to fund home-improvement projects. The data suggests that some millennials are resorting to buying old homes and renovating them as an alternative to attempting to outbid an all-cash offer but that some are now living in fixer-uppers they can't afford. But one in four of the millennials who bought a fixer upper regret their decision, per the Clever Real Estate survey.

Meanwhile, 30% of millennials each regretted bad neighbors, a neighborhood that changed too much, and upkeep that was too expensive. They're realizing that there are plenty of hidden costs for homeownership, from HOA fees and property tax increases to maintenance for landscaping and appliances.

Regardless of today's housing crisis, it seems that homeownership isn't always what it's cracked up to be.