3 things to do if you regret buying a house in today's hectic market, according to a financial therapist
Amanda Clayman
The US real estate market is a seller's market right now, which means there are more people trying to buy homes than there are houses for sale. This means buyers have fewer options, have to make decisions quickly, and often pay more than they would have expected to a year ago.
A recent Bankrate survey found that 64% of millennials who have bought homes during the current hot market say they regret their decision. Reasons ranged from expensive mortgage payments, to their houses being too big or too small, to high maintenance costs.
Financial therapist Amanda Clayman told Insider that buyers shouldn't let regret pressure them into making an impulsive decision, such as turning around and immediately selling the house. Instead, taking the time to process your regret can help you find the right solution.
1. Figure out why you're feeling regret
If you're a new homeowner experiencing regret, Clayman recommended that you take time to check in with yourself about what you're feeling and why. The reality is that you may not have made a huge mistake by buying the home – you might just be stressed from buying a home quickly during a global pandemic.
"Stress is like an early warning system," Clayman said. "It's supposed to say there is a potential threat, and you need to come out of your automatic, pattern-based responses, think about this, and pay more attention to it."
She explained that paying extra attention to an issue takes up resources in our brains and can often make us feel bad. But these negative feelings don't necessarily mean the situation is bad; they just mean your brain is tired from paying extra attention. If you're stressed from buying a home, you may assume that the negative feelings mean you've made the wrong decision. But that's not always true.
When we are stressed, we often think we need an immediate solution, like selling the house we regret buying. But you can just check in with how you're feeling now, then check back in after two months, then three months. You may feel differently each time you evaluate the situation. Or you might have new information that changes your approach, like that you've received a raise and now feel more comfortable making mortgage payments.
2. Play out scenarios for fixing pain points
If you realize that you still regret buying the home each time you check in with yourself, it may be time to take some sort of action.
For example, 14% of millennials Bankrate surveyed said they regretted buying a home because it was too big. Clayman recommended sitting down to contextualize why you feel your home is too large.
"Does it feel too big because now I feel like I have to buy all of this furniture that I didn't anticipate?" she said. "Is it too big because I feel like it's more house now that I have to take care of? Or my taxes are too high because they're based on value and square footage?"
Once you understand the source of your stress, you can think about how to move forward. Play out multiple scenarios in your head.
If you regret buying because your mortgage payments are too high, you could consider moving to a more affordable house. Play out this scenario in your head, including the time and cost of moving again. Or you could Airbnb a room in your house for extra income – play out how this would affect your life.
"When we generate multiple options, the psychological benefit is that it helps us feel less trapped," Clayman said. "And when we feel trapped, that's the thing that's going to increase our anxiety."
You may find a scenario that works for you. Or after going through several options, you could decide that living in the house without making any changes is the right choice.
3. Don't beat yourself up
Clayman said that people should understand that financial journeys aren't always linear.
"There is learning and growth that happens over the course of the life cycle," she said. "I think we have to appreciate that there may be very expensive lessons along the way. But this is not a pass/fail process."
She also expressed that even though buying a home may feel like a mistake now, you might realize down the road that it was the right decision.
If you regret buying a house, give yourself a little grace and learn from the experience.
About the author
Laura Grace Tarpley is an editor at Personal Finance Insider, covering mortgages, refinancing, mortgage rates, and lending. She is also a Certified Educator in Personal Finance (CEPF). Over her five years of covering personal finance, she has written extensively about ways to navigate loans.
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