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Signs of Widespread Buyer Regret Emerge

June 3, 2022

Seventy percent of recent home buyers say they rushed their property purchase due to market pressure, according to a new survey of more than 1,000 consumers conducted by MoneyWise. Rising home prices and mortgage rates made many buyers speed up their timelines, the survey notes.

The speed of their decisions may later lead to some regrets, particularly when it comes to the mortgage. Seventy-eight percent of respondents with adjustable-rate mortgages say they regret their purchase decision. Fifty-five percent of those with a fixed rate feel the same, according to the survey.

Adjustable-rate mortgages are growing more popular as home buyers look for a cushion to offset rising rates. ARMs tend to have lower introductory rates, typically for five or seven years, but then reset to possibly higher mortgage payments later on.

Respondents to the MoneyWise survey also show some regrets about their loan terms. Seventy-one percent of recent home buyers who gravitated toward a 15-year loan say they regretted their decision. Those with a 30-year fixed-rate mortgage had the least regrets.

Buyer regret chart

 

Source: 
How Much Do Americans Know About Buying a Home?” MoneyWise (April 28, 2022)