Over 80 Percent of Millennials Regret Buying First Home in 2023: Report

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Giulia Carbonaro is a Newsweek reporter based in London, U.K. Her focus is on the U.S. economy, housing market, property insurance market, local and national politics. She has previously extensively covered U.S. and European politics. Giulia joined Newsweek in 2022 from CGTN Europe and had previously worked at the European Central Bank. She is a graduate in Broadcast Journalism from Nottingham Trent University and holds a Bachelor's degree in Politics and International Relations from Università degli Studi di Cagliari, Italy. She speaks English, Italian, and a little French and Spanish. You can get in touch with Giulia by emailing: g.carbonaro@newsweek.com.

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Millennials just can't catch a break—even those who made it through two economic recessions and finally managed to buy a home.

According to this year's Millennial Home Buyer Report, released by Real Estate Witch, eight out of 10 millennials say they regret buying their first home, having entered one of the most expensive housing markets in United States history.

Fueled by high demand, low inventory, and historically low interest rates, home prices skyrocketed in the two years following the pandemic, squeezing many potential homebuyers—including millennials—out of the market entirely. Last year, as the Federal Reserve dramatically increased interest rates in an attempt to bring down growing inflation, mortgage rates went spinning, making home buying an even more unaffordable process for many.

The high price of homes across the U.S. remains the number one barrier for 47 percent of millennials trying to buy a home, according to the Real Estate Witch's survey. Those millennials who were able to buy one before interest rates surged, on the other hand, aren't feeling lucky at all.

U.S. housing
This aerial image taken on February 8, 2023, shows a neighborhood of homes in the wildland-urban interface near Chino Hills State Park in Chino Hills, California. Eight in 10 millennials experience some form of buyer's... PATRICK T. FALLON/AFP via Getty Images

Eighty-two percent of respondents said they were unhappy with their decision to buy a home, with 22 percent of them saying that their main cause for regret is that their interest rate is too high. Some 63 percent of respondents to the survey plan to refinance their mortgage once interest rates go down.

The second most common cause for regret (21 percent) was not being educated enough about the home-buying process, as well as having bought in areas that have changed too much since the purchase. millennials also regret not picking a better location (19 percent), failing to anticipate future needs (18 percent) and having bought a home when they were "too young" (17 percent).

After mortgage rates more than doubled by mid-2022, most housing experts have predicted a correction of the housing market which has undoubtedly started. As demand dropped through the second half of last year, so did sales. And with dropping sales, home prices also started going down—but not nearly as dramatically as many potential homebuyers would have hoped for.

That didn't translate into immediate good news for millennials trying to buy a home: facing a higher mortgage rate environment, sellers tend to hold on to the homes they got on a much lower mortgage rate, creating a sort of tug of war with buyers.

But the current crisis unfolding in the banking sector might lead the Federal Reserve to decide to hike interest rates less than previously suggested, in order to appease fears of contagion to the entire banking industry. That, in turn, could completely upend the housing market, experts say.

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About the writer

Giulia Carbonaro is a Newsweek reporter based in London, U.K. Her focus is on the U.S. economy, housing market, property insurance market, local and national politics. She has previously extensively covered U.S. and European politics. Giulia joined Newsweek in 2022 from CGTN Europe and had previously worked at the European Central Bank. She is a graduate in Broadcast Journalism from Nottingham Trent University and holds a Bachelor's degree in Politics and International Relations from Università degli Studi di Cagliari, Italy. She speaks English, Italian, and a little French and Spanish. You can get in touch with Giulia by emailing: g.carbonaro@newsweek.com.

Writers Page

Giulia Carbonaro is a Newsweek reporter based in London, U.K. Her focus is on the U.S. economy, housing market, property ... Read more