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Home owners have lost a combined $1.5 trillion in equity since May as property prices start to tumble – and as many as three quarters of those who bought during the pandemic now say they regret the decision.
Prices surged by 45 percent in the pandemic, leaving buyers with regret as prices are now starting to plummet as the US beings to return to pre-pandemic numbers. Many first-time buyers have been left with homes they have to do up, as well as properties in a location that was not their first choice.
Nearly three quarters of those who purchased homes in the pandemic are regretting their decisions, with many wishing they hadn’t even put an offer in.
Kim Kingsman purchased her first home in Portland, Oregon, in 2021 after saving up money from not travelling and mortgage rates hitting a low point.
But her dream home was littered with problems, and she found beard shavings in the bathroom, carpets which smelled like cat urine and issues with water pressure and air conditioning.
She was also left without parking privileges after a messy lawsuit which the previous owners left behind – calling it a ‘complete headache’.
House prices surged by 45 per cent in the pandemic, leaving buyers with regret as prices are now starting to plummet as the US beings to return to pre-pandemic numbers
Kim Kingsman purchased her first home in Portland, Oregon, in 2021 after saving up money from not travelling and mortgage rates hitting a low point
Homeowner equity peaked at $11.5 trillion collectively in May last year, with prices still up by 41 percent in September.
Those who bought their properties before the pandemic have $5 trillion more than before the pandemic hit – a gain of $92,000 more equity per borrower than in February of 2020.
On average borrowers have lost around $30,000 in equity since May, with home prices weakening as mortgage rates rose last spring.
It meant that homes were a lot less affordable to buy, and the monthly payment on the average home, with a 20 percent down payment on a mortgage, is up almost $1,000 since the start of the year.
In 10 percent of the major markets, which include Las Vegas, Miami, Los Angeles, Phoenix, Tampa and San Diego, homeowners have to spent twice the long-term average amount of median household income to make their monthly payments.
Nearly three quarters of those who purchased homes in the pandemic are regretting their decisions, with many wishing they hadn’t even put an offer in
Many homeowners bought fixer-upper properties and discovered more problems than they initially expected
Home prices fell in September for the third month in a row, thought the decline was not as steep as the previous two.
Usually, prices drop from summer to fall because of a seasonal slowdown but the numbers fell more sharply this year.
According to Anytime Estimates’ American Home Buyer survey nearly 75 percent of Americans who bought homes in 2021 and 2022 have regrets.
The average US homeowner paid an average of $494k for their home, with almost a third paying more than the asking price.
Eighty percent of buyers compromised on their priorities, which included finding the right location, while others bought before even seeing the properties in person.
House prices are now down 2.6 per cent since the end of June, which is the first three month drop since 2018 and the steepest since 2009 when the financial crisis hit.
Median house prices dropped down by $11,560 since July, though they are higher than they were in September last year.
Less than 500,000 borrowers are currently struggling to go under on their mortgages, which is double the number in May.
People who purchased their homes in the past year are most at risk of going underwater after buying at the peak of the market.
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