Millennials, those between the ages of 21 and 34, are often dubbed the “renter generation,” as the sweet combination of low income and high student loans prevents them from buying homes as their parents did at that age. But according to CNBC, four in ten millennials have made the leap to purchase a house, eager to spite older generations who mock their choices.
Unfortunately, most of those millennials regret their decision — 68 percent, exactly — according to a study by Bank of the West. CNBC explains that there are several reasons this is the case:
1. Making a large down payment
Of the millennials they surveyed, Bank of the West found that one in three who purchased a home dipped into their retirement funds to make their down payments. Along these lines, Realtor.com analyst Danielle Hale told CNBC that purchasing a home that is initially out of your price range is a poor decision to make, as appealing as it may sound in terms of home quality and size.
2. Underestimating costs after purchase
When purchasing a home, many millennials forget how high maintenance costs can be. Without a landlord to call to make repairs, home owners are completely financially responsible for fronting the money to keep their houses in good shape. Of course, they are aware of the normal costs–heating, electricity, etc.–but are underestimating surprise expenses.
3. Settling for a house they don’t like
On the flip side of #1, two-thirds of millennials reported that they ended up compromising on a feature of their homes, for lack of funds to find a house that fits their standards, or for lack of expertise in this area. A consequence of this is that many millennials end up dissatisfied with their choice, and later regret their purchase altogether, perhaps a waste of money.
Jumpstart a career doing something you are passionate about with one of College Media Network’s courses. Read about our current offerings, schedule and unique virtual learning environment here.