A surprisingly large number of new homeowners are feeling regret after their purchase, largely because of unexpected costs associated with the purchase, reports a new survey of 1,500 homeowners from personal finance website Bankrate.
In fact, 63 per cent of millennial homeowners (and 44 per cent of all homeowners) have at least one regret about buying their home. What comes in at #1? Not taking maintenance and repair costs into consideration, Bankrate found.
“Paying for these expenses can be a shock to new homeowners’ wallets after making a sizeable down payment and shelling out cash for closing costs,” reports Bankrate.
That finding isn’t without precedent: A 2018 survey from NerdWallet found that found that 44 per cent of new homeowners incurred an unexpected repair cost within one year of closing. In total, NW reports that Americans spent nearly $635 billion on home improvements between 2015 and 2017.
If you’re in the market for a new home, John Bodrozic, the co-founder of digital home-management firm Home Zada, offered this rule of thumb to Marketwatch: Save between one and four per cent of the purchase price of the home for those unexpected costs, in addition to your emergency fund:
“If the home is less than five years old, then one per cent is the better number because the home’s equipment, appliance, and building materials are still relatively new,” [Bodrozic] explains. “But if a home is 20 years or older, then the four per cent number is more realistic because many of the home’s equipment, appliance and building materials have reached the end of the their useful life, and you will need to replace them.”
With the median home value in the United States currently at $317,803, according to Zillow, that means you’ll need to stash away between $3,178 and $12,712.
Additionally, a different Bankrate survey from 2018 found that homeowners spend an average of $2,000 a year on maintenance costs, meaning that’s another expenditure to take into account when you’re saving, buying and budgeting in the years to come.