Millennials are more than twice as likely to be stressed about homeownership as their baby boomer counterparts. In fact, 51% feel buyer's remorse, compared to just 20% of boomers.
That's according to real estate website Clever, which conducted a survey of 1,000 homeowners comparing millennials (those ages 23 to 38) and boomers (those ages 55 to 73). The survey explores why young people are "more stressed about owning homes than any other generation."
Millennial homeowners' No. 1 regret is that they say their mortgage payments are too high. Thanks to rising housing costs and competing expenses like student loans, more than two-thirds, or 67%, put down less than 20% on their homes, resulting in higher monthly payments.
Additionally, most millennials who purchased homes without a 20% down payment will be required to pay private mortgage insurance until they've paid enough on their mortgage that they only owe 80% of the current market value of the home. PMI can add up quickly: It typically costs about 1% of your outstanding loan balance, on top of your monthly mortgage payments.
Experts recommend trying to build that 20% in home equity as quickly as you can to avoid racking up additional fees.
The second biggest reason millennial homeowners have regrets is because of how expensive home repairs and updates can be: 43% of young homeowners were surprised by the cost of maintaining their homes. It could be pricey, in part, because millennials are more likely than boomers to buy a fixer-upper that requires big projects. Therefore, they're investing "more time and resources into home repair, maintenance and renovations," the survey says.
Aside from mandatory repairs, 80% of millennials say they plan to renovate in the next five years, compared to 70% of boomers. And not only are millennials taking on 49% more renovation projects than boomers, they're also three times as likely to use a personal loan and twice as likely to use a credit card to finance the work.
But leaning too heavily on credit and loans could come at a cost: The average credit card APR is more than 17%, while, depending on the borrower's credit score, a personal loan could run between 10% and 30% APR. Interest fees can add up quickly if you don't pay your balance off.
Overall, about 20% of millennials feel their home has depreciated in value since they bought it, according to the research, while 17% think it's too small, 17% think the interest rates are too high and 14% say the location is not ideal.
The majority of millennial homeowners, or 61%, have owned their homes for less than five years, however, so it's no surprise that some are still figuring out the nuances: "All of this isn't to say that millennials are, as a generation, inherently unfit to own homes," the researchers conclude, but "rather, being a young homeowner is stressful."
If you're looking to buy a home, experts suggest you make sure you're ready to transition from renting and consider some of the markets where homes are most affordable for young people.
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