Are we sending too many marginal buyers into the homeownership abyss? Research suggests we are.
Not because they can’t afford their mortgage payments, which they often barely can. Rather, because the actual cost of owning and caring for a house can sometimes be overwhelming, if not downright devastating.
Never mind that more young home buyers can name the latest Taylor Swift tune than their lawmakers in Washington. More importantly, at least in the mortgage business, nearly two-thirds of them cannot ID the four elements of a mortgage payment, according to a study by Clever Real Estate. Spoiler alert: It’s principal, interest, taxes and insurance, or PITI for short.
Another survey, this one from insurance group Hippo, found that roughly half of recent home buyers said owning a house is more expensive than they anticipated; there’s just too much maintenance and upkeep. A Zillow study found that three out of four buyers have regrets; chief among them, the home needs more work or maintenance than expected.