September 29, 2022

Frenzied real estate market comes with regrets for most homebuyers

Multiple bids, cash offers and fast sales created a real estate frenzy in desired locations…

Multiple bids, cash offers and fast sales created a real estate frenzy in desired locations in Maine and across the nation that has led to 70 percent of buyers having at least one regret, a national survey found.

The top regret cited by about one in five purchasers in the U.S. was underestimating the total cost of buying a home, according to a recent survey by HomeLight, an online real estate marketplace. That includes higher down payments, higher prices fed by bidding wars and more routine things like insurance and maintenance costs.

Some rushed to buy before mortgage interest rates rose further. Rates have been below 3 percent for much of the past couple years, but inflation pressures have pushed them up since February to a national average of 5.42 percent this week for a 30-year fixed mortgage, the highest rate since April 2010.

The Federal Reserve is expected to raise interest rates by half a percentage point this week, which will push up mortgage rates and interest rates on credit cards, auto loans and other types of consumer lending.

Some 20 percent of those surveyed said they bought a home too fast and 40 percent bought an older or smaller home than they initially planned.