The Hidden Cost of Waiting to Buy a Home

As home prices and the cost of living rise, many Americans are feeling hesitant to buy a home. However, many believe that they’ll also pay a price if they wait too long, according to a survey by Lombardo Homes. 

Renters Feel Trapped 

The survey revealed that 9 in 10 renters feel trapped between rising rents and rising home prices, yet 93% worry that waiting to buy a home will make homeownership even less affordable.  

When asked whether buying a home felt impossible in today’s economy, 84% of renters said yes, and 6 in 10 said they regret not buying a home sooner. 

The top reasons why renters said they were delaying a home purchase were: 

1. High home prices (84%) 
2. Lack of down payment savings (67%) 
3. Rising interest rates (61%) 
4. Economic uncertainty (51%) 

Still, of the respondents who were renting at the time (44%), 84% said they had intentions to buy a home someday. 

The Financial Consequences of Waiting 

Of all respondents, 77% said they believed that waiting to buy has financial consequences, and 68% said they thought they would have saved money if they had bought a home sooner. 

“First-time buyers face huge hurdles in the market, including low inventory, higher home prices, higher mortgage rates, student loan debt, higher rental prices and childcare costs,” Dr. Jessica Lautz, deputy chief economist and vice president of research at the National Association of Realtors®, recently told PAR members. “With the first-time homebuyer average age of 40 years old, compared to 28 years old previously, this represents approximately $150,000 in lost equity over time,” she noted. 

The top consequences they believed come from waiting were: 

1. Higher home prices over time (77%) 
2. Paying rising rent (72%) 
3. Higher interest rates (59%) 
4. Missing out on home equity growth (54%) 
5. Reduced buying power (31%) 

What would motivate them to buy sooner? Lower interest rates (67%), having more savings for a down payment (60%) and having a stable job or income (57%) were the most common answers. 

Homeowners Wish They’d Bought Sooner 

Of the homeowners surveyed (56%), 46% said they wished they had bought sooner. 

Most (39%) waited two to three years to buy, but 25% waited five to 10 years, and 17% waited more than 10. 

What finally pushed them to purchase? 

1. Need for stability and long-term housing security (69%)
2. Desire to invest in their financial future (58%)
3. Wanted to start building equity (53%) 
4. Tired of dealing with landlords and rental restrictions (43%) 
5. Rising rent costs made homeownership seem more affordable (42%) 

Financial help was still utilized for 46%, and of those, 31% received help with a down payment.