Wants vs. Needs: House Hunters Forced to Compromise

A new Zillow survey found that 75% of buyers who successfully bought a home in the past two years reported having at least one regret about the home they purchased. Some 32% of new buyers regret buying a home that needs more work or maintenance than expected, while a similar percentage regret purchasing a home deemed too small. 

Most successful buyers wish they had done at least one thing differently during the shopping process, with 38% wishing they had spent more time searching for a home or weighing their options. About 28% said they would have shopped for and purchased a home in a different area. 

"The pandemic-driven feeding frenzy in the for-sale market added challenges for buyers, especially those purchasing for the first time," said Zillow Population Scientist Manny Garcia. "This research suggests many of those buyers ended up in a home that was less than ideal. It's important to remember that even in a balanced market, most buyers have to make compromises to stay within their budget. To minimize regret, aspiring buyers would be wise to establish where they're willing to compromise and what's a deal breaker before shopping."

Experts suggest a checklist may help house hunters establish their needs versus their wants. When shopping with a partner, the right home should meet the needs of both parties to avoid regrets. Another option offered to counteract purchase doubt is the use of new tech tools, which make it easier for home buyers to understand a property’s layout before touring it in person. Interactive floor plans and virtual 3D Home® tours can give buyers a more accurate sense of the spatial relationship between rooms in a home. 

A vast 81% of successful buyers reported having to make at least one compromise in order to afford their home, while nearly 39% say they ended up in a location that increased their commute time. 

"Buyers can get distracted by a pretty kitchen or great staging when they should concentrate instead on a home's two biggest factors: its layout and location. It's very tough to change both," said Seattle-based Zillow Premier Agent Partner Lucas Pinto, team lead at the Lucas Pinto Real Estate Group, Compass. 

Buyer burnout has also become increasingly common amid rapid home price appreciation. Nearly 60% of successful buyers say they took a break from their home search, while 72% of prospective buyers say they have done the same. Prospective and successful buyers who paused their search were most likely to do so because the type of home they wanted to buy became too expensive. 

Pandemic-era buyers faced unprecedented challenges, as they had far fewer homes to choose from and much more competition for the homes that were listed for sale. Inventory fell to a new low, down more than 40% compared to pre-pandemic levels, while home values surged nearly 20% in 2021.   

Today's buyers may face similar conditions, but in a calmer market, they should have more time to assess their options before making one of life's biggest financial investments. In June 2021, the typical U.S. home flew off the market in just one week.  

That time frame has expanded every month since, to roughly 13 days in December 2021. Home values are expected to keep climbing, but Zillow economists predict those values will rise at a slightly slower rate than last year's rapid pace.