Regrets About Mortgages Don't Dim Millennials' Love for Their Homes
Unexpected maintenance and repairs are a shared headache for all owners, but younger homeowners are more likely to have regrets about their financing
SEATTLE, May 29, 2019 /PRNewswire/ -- Younger homeowners more often say they rushed through the buying process and have regrets about their mortgage, likely resulting from the challenges young buyers face entering today's expensive housing market.
Still, homeowners of all ages are, for the most part, happy with their home purchases, a recent Zillow® survey shows.
The Zillow Housing Aspirations Report is a semiannual survey conducted by Ipsos of 10,000 homeowners and renters in 20 large metro areas across the country, asking the respondents about their views on homeownership and their personal housing expectations. In the latest survey, it also asked about regrets.
Overall, 81% of young homeowners (between 18 and 34 years old) had at least one regret about their home, compared with 65% of those 55 years and older. Some of the biggest disparity was related to regrets about their mortgages. Millennial and Generation Z homeowners are more likely to think their mortgage payments and interest rates are too high, and have more regrets about the type of mortgage they have.
The increased likelihood for regrets could be due to their inexperience with the home buying process. Young owners are likely still living in their first homes, which means they went through the process of finding a lender and getting a mortgage for the first time. Navigating this process for the first time may explain why they are more likely to say they rushed the home buying decision without considering all their options – 29% of young homeowners regret rushing the process, compared with 12% of older buyers.
The Zillow Group Consumer Housing Trends Report shows that millennials (ages 24-38) contact more lenders when planning to buy a home than older generations - so they are doing their homework when it comes to finding the best mortgage partner, but may have smaller down payments or more debt affecting their credit scores, and therefore their interest rates.
"The American Dream of homeownership is still alive and well, and younger buyers who are building families and forging their careers must stretch their budgets to achieve it," said Zillow Director of Economic Research Skylar Olsen. "They have long wish lists to fit their needs, and are often navigating the process of buying for the first time. While their inexperience may lead to wishing they'd done some things differently, few homeowners regret making the decision to buy instead of rent."
First-time buyers already make up nearly half of all buyers, and there is a growing population of millennials set to turn 34, the median age of first-time buyers. For these potential new buyers, being educated and prepared can help avoid some of these common regrets. In addition to contacting multiple lenders to find the best rate and mortgage product, working with an agent with a winning track record can help navigate the process so buyers don't end up feeling rushed and regretting their decision. The Best of Zillow program, which recognizes the top-rated agents based on customer feedback, can help buyers find the best agent partner for them.
Homeowner Regrets
18-34 years old |
55+ years old |
|
Rushed the process without evaluating all the options |
29% |
12% |
Mortgage payments are too high |
30% |
12% |
Interest rate is too high |
27% |
12% |
Type of mortgage |
22% |
7% |
Purchasing a home instead of renting |
17% |
4% |
Zillow
Zillow is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with great real estate professionals. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow Group's Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists, data analysts, applied scientists and engineers produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Launched in 2006, Zillow is owned and operated by Zillow Group, Inc. (NASDAQ:Z and ZG), and headquartered in Seattle.
Zillow is a registered trademark of Zillow, Inc.
SOURCE Zillow
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