ST. LOUIS–With many younger credit union members seeking to become first-time homebuyers, even in a very hot market, the actual costs of homeownership can come as a surprise, as a new survey makes clear.
According to the new survey, released by Clever, the optimism shared by new homebuyers can evaporate if a first-time home buyer isn't prepared for unexpected costs. Among the 1,000 homeowners the company surveyed, 52% acknowledged the true cost of owning a home surprised them.
“Not only has the upfront cost of buying a house spiked in the last year amid the COVID-19 pandemic[—but our research also shows the average homeowner shells out an additional $15,405 each year on top of their mortgage,” the company said.
According to Clever, homeowners spend:
- $4,829 on utilities
- $3,300 on home improvements
- $3,018 on maintenance and repairs
- $2,578 on property taxes
- $1,680 on homeowner’s insurance
“Altogether, these costs have increased by over $2,000 since we last surveyed homeowners in 2019,” stated Clever in releasing the survey findings. “The result is a grim financial landscape for homeowners: Only 55% of homeowners live in what U.S. housing officials consider ‘affordable housing’ (spending 30% or less of household income). In fact, the share of homeowners spending over 40% of their household income on their living space has nearly doubled since 2019 — from 16% to 29% in 2022.”
Clever said that the higher costs could be behind a sharp surge in buyer's remorse after it found that 60% of homeowners said they've felt some form of buyer's remorse — up from 35% in 2019.
Additional Findings
Among the other findings from the survey of 1,000 homeowners:
- More than half of homeowners (52%) say the true cost of owning a house took them by surprise.
- A majority of homeowners (60%) have experienced buyer's remorse, including one in four homeowners who say they often feel buyer's remorse.
- The share of homeowners spending over 40% of their household income on housing has nearly doubled since before the COVID-19 pandemic (16% vs. 29%).
- More than 70% of homeowners regret at least one aspect of their home purchase. Among those homeowners, the most common regrets are that their house requires too much maintenance (40%) or is too small/lacks features (32%) or they were unprepared for hidden costs (30%).
- One in eight homeowners say the benefits of owning aren't worth the hassle.
- On average, homeowners spend 19 hours a month on home maintenance, repairs and improvements. That adds up to nearly 230 hours each year, the company said.
- One-third of homeowners spent more than $5,000 on maintenance in 2021. Millennials are 3x more likely to spend at least $5,000 on home maintenance than Baby Boomers, according to Clever.
- Homeowners spend about $2,000 more than renters on utilities annually.
- New Jersey has the highest property taxes, while Alabama has the lowest: The median homeowner in New Jersey pays 14x more in property taxes each year than the median homeowner in Alabama.
A Different Approach
According to Clever, the survey also found most homeowners (53%) admit they would have approached buying differently if they realized the actual cost of homeownership. Out of that group:
- 42% would have negotiated a better price or contingencies
- 29% would have waited to buy a home
- 29% would have purchased a less expensive home
Though Americans tend to consider homeownership a financial and personal milestone, many are troubled by lingering thoughts of buyer's remorse, Clever added.
A majority of homeowners (60%) say they've felt buyer's remorse at some point:
- 25% often feel home buyer's remorse
- 20% sometimes feel home buyer's remorse
- 16% rarely feel home buyer's remorse
- 40% never feel buyer's remorse
Regrets are especially common among those who purchased a home during the pandemic (2020 or later), when sale prices began to boom. Nearly two in five (39%) pandemic-era buyers often feel remorse.
The full survey findings can be found here.
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