14 Ways Homeownership is Overrated (2024)


Homeownership isn’t all it’s cracked up to be. Here are 14 reasons it’s honestly overrated.

14 Ways Homeownership is Overrated (1)

By Grace Lemire

14 Ways Homeownership is Overrated (2)

Edited by Jeff White

Updated April 20, 2024

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Conventional wisdom says homeownership is your ticket to building wealth, so it’s no surprise that around 57% of Americans feel pressured to buy a home.

But is homeownership all it’s cracked up to be? This question has sparked increasing debate over the past several years.

There's a huge cost issue with homeownership that many believe doesn’t make it worth it anymore. Here are 14 of the biggest downsides to consider before purchasing a home.

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HOA fees can be high

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Over a third of homeowners live in an HOA community, paying an average of $291 per month in HOA fees.

That’s an additional $3,500 per year on top of your mortgage, taxes, insurance, maintenance, and other fees. You may find yourself needing to make extra money to pay for ownership costs.

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You’ll need to save for annual maintenance costs

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Experts recommend saving around one percent of the total purchase price of your home per year for maintenance costs. For example, a $300,000 home would require $3,000 per year in savings.

In a rental, you can expect to cover minor expenses — like a scratched wall or chipped paint — with your security deposit. Your landlord will likely cover routine maintenance expenses, though.

Appreciation isn’t guaranteed

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Appreciation — or the value of property increasing in value over time — is touted as one the most compelling reasons to purchase a home. However, appreciation is often overestimated and isn’t guaranteed.

According to the Journal of Housing Economics, homeowners overestimate the appreciation of their homes by 8%. In April 2023, home prices were down 4.2% but were up by 4.8% by March, showing the inherent volatility of the housing market.

If you plan to buy a home and hold onto it for a long period of time, it might be a wise investment. But in the short term, it might not garner the returns you expect.

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Most people regret the expense

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According to a 2022 study by Hippo, 78% of homeowners have had regrets about purchasing a home within the previous 12 months.

Respondents cited misunderstanding the expenses related to owning a home, having too many unexpected issues arise, and dealing with too much maintenance and upkeep as points of frustration.

Property taxes are a hefty cost

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Many homeowners believe that property taxes are more expensive than they initially thought. In 2024, homeowners will spend an average of $2,971 on property taxes.

However, this expense can vary drastically based on your location. For example, a $500,000 home in Dallas, Texas, can cost you around $8,568 per year in property taxes alone, but it would be much less in Nevada.

Repairs are all on you

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When renting, damage that you don’t cause is typically covered by your landlord. However, when you own a home, that expense is completely your responsibility.

Some unexpected expenses — like a flood damaging the drywall or broken furniture from an earthquake — can leave you spending thousands of dollars on repairs you weren’t expecting.

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You’re locked into one location

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If you’re loyal to a specific location and can't imagine yourself leaving, purchasing a home there might be a solid decision. Otherwise, it can leave you stuck in a single location for longer than you’d like.

If you desire something new, accept a job in another city, or want to move for any other reason, you’ll need to embark on the journey that is listing and selling your home.

With a rental, it’s easier to simply break or finish off your lease, pack up, and move on to greener pastures or move on to a little variety.

Free time is taken by repairs and maintenance

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Mowing the lawn, trimming the shrubs, and organizing the garage isn’t everyone’s idea of leisure. But, if you purchase a home, much of your free time will now be dedicated to it.

Homeowners spend an average of 90 minutes per day on household activities, while renters spend just 67 minutes.

Over the course of a year, that’s over 141 hours, or around six days, that renters save. Just that time alone could allow you to spend more time with family or take on a new hobby.

The location might not be desirable

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In the largest metro areas, at least 61% of renters can’t afford to purchase a home within the city.

Since costs tend to be cheaper in the suburbs, homes outside the city might be the only ones in your budget.

If you value living in the heart of the city, homeownership in the ‘burbs might not be ideal.

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You’ll likely need to take on debt

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Many Americans use a mortgage to finance the purchase of their home. In 2022, the average mortgage balance was $236,443 — which is one massive loan to constantly be paying off.

Debt can cripple an individual if they fall on hard times. While real estate debt is considered a good thing, it might not fit your long-term financial goals.

You may lose access to amenities

rilueda/Adobe 14 Ways Homeownership is Overrated (14)

Apartments often include various amenities, such as a swimming pool, fitness center, covered garage, and more.

If you purchase a home, it’s your responsibility to add those amenities if your home doesn’t already include them, or you’ll simply go without.

Given that installing an inground pool costs around $35,000 alone, adding the amenities you want might not be within the budget.

Your mortgage payment could change

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Homeowners with fixed-rate mortgages will see consistent payments. However, if you have an adjustable-rate mortgage, your interest rate could change over time.

On a $320,000 mortgage loan with a 6.7% starting interest rate, just a 2% increase could increase your monthly mortgage payment by $441 per month.

That’s an additional $5,292 per year — not an amount that’s simple to find in your budget. Knowing what your rent will be for the next year might be more appealing.

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Homeowners insurance is expensive

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Whether you rent or buy, it’s wise to purchase insurance. In most cases, however, homeowners insurance will be significantly more expensive than renters insurance.

With Progressive, a rough estimate shows that a renter’s insurance costs just $14 to $30 per month, but homeowners insurance can cost $81 to $138 per month or more.

With renter’s insurance, only a few factors impact the pricing: location, type of residence, insurance score, and coverage. With homeowners insurance, factors like pools, trampolines, pets, home businesses, and roof types can all increase the rate you pay.

It doesn’t always make sense for your stage of life

Rido/Adobe 14 Ways Homeownership is Overrated (17)

Purchasing a home might make sense if you’re looking to plant roots, have children, or retire in one area.

However, if you’re young, planning to relocate, or looking to travel, purchasing a piece of property could become a burden. You might consider getting a travel rewards card instead.

Bottom line

Fabio Principe/Adobe 14 Ways Homeownership is Overrated (18)

Homeownership can be a wise financial decision, but only if you believe the pros outweigh the cons. More and more people are starting to find renting to be the superior option

When you rent, your payments will be locked in and you won’t find yourself scrambling, which is especially important if you’re trying to move beyond living paycheck to paycheck.

The end benefit to homeownership also may not be as appealing as many believe it is, especially if the home isn’t owned for many years prior to a sale. However, only you can decide which path is right for you.

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14 Ways Homeownership is Overrated (2024)


What are 3 advantages and disadvantages of owning your own home? ›

Added tax benefits
Pros of owning a homeCons of owning a home
Predictable, long-term expensesLong-term commitment
Better privacy and autonomyHigh homeownership costs
More living spaceMore difficulty relocating
Tax advantagesRisk of decreased home value
1 more row
Mar 12, 2024

Is homeownership actually worth it? ›

Do you actually save money buying a house? It depends on many factors, including how expensive the house is and where it's located. Often, once you get past the one-time down payment and closing costs, your monthly mortgage payment is lower than rent would be. But that can vary by market.

What are the pros and cons of buying a house? ›

What's your goal?
Can help increase your credit scoreMarket fluctuations
PrivacyTime isn't always on your side
Control over your spaceMaintenance and home repair
Stable payments with a fixed mortgageProperty taxes and other recurring expenses
3 more rows
Apr 5, 2024

What are the benefits of not owning a home? ›

Unlike homeowners, renters have no maintenance costs or repair bills and they don't have to pay property taxes. Amenities that are generally free for renters aren't for homeowners, who have to pay for installation and maintenance.

What are 5 disadvantages of owning a home? ›

Disadvantages of owning a home
  • Costs for home maintenance and repairs can impact savings quickly.
  • Moving into a home can be costly.
  • A longer commitment will be required vs. ...
  • Mortgage payments can be higher than rental payments.
  • Property taxes will cost you extra — over and above the expense of your mortgage.
Jun 3, 2021

What are the negatives of home ownership? ›

The disadvantages of owning a home mostly fall into the category of permanence, with a dash of financial uncertainty. Buying a new house costs money, and a lot of that money comes out of your pocket at the time of the purchase. Later, there are no guarantees that home prices will rise.

Are home owners happier? ›

Measuring homeowner happiness

For the analysis, Home Bay surveyed 500 homeowners and 500 renters in the U.S. Surveyees scored the overall happiness level of homeowners at 88% compared to 67% for renters.

Why is homeownership so stressful? ›

It's no wonder why: Buying a home is one of the most stressful life events. It combines high emotions, an often-finicky housing market, and a process that can seem difficult to understand. It's also a significant financial transaction for most people — perhaps the biggest of their lives.

Is homeownership declining? ›

Homeownership in California is increasingly out of reach relative to the country: in 2021 the share of adults who own their home in California was just 43.5 percent, more than 15 percentage points lower than the rest of the United States, which is the largest the gap has ever been.

What are the hidden costs of owning a home? ›

Other potential monthly costs include taxes, homeowners insurance, private mortgage insurance (if you have an FHA mortgage), and HOA fees, if applicable. You will also likely pay monthly heating and cooling, electricity, and water.

How do most people pay for their homes? ›

Depending on your situation, you may be eligible for a special government program, like an FHA, USDA, or VA loan. Most people believe that conventional loans through a bank are the only way to borrow money to buy a house.

What are two advantages of owning a home? ›

Homeownership may seem like a daunting task, but the payoff is highly rewarding!
  • 1) Financial stability. In terms of both lifestyle and monetary stability, buying a home provides a new sense of reliability to first-time homeowners. ...
  • 2) Financial strength. ...
  • 3) Tax benefits. ...
  • 4) Permanent residence. ...
  • 5) Sense of community.

Is it better to be house poor or rent? ›

Since renting an equivalent home is often cheaper than owning it, you may be able to take being house poor off the table and invest your cash flow difference toward your long-term goals.

Is it bad if I never buy a house? ›

Many people assume that owning a home is the best way to achieve financial stability. It's more than possible to become financially secure as a renter. It can be argued that renting is a better move than owning financially, because you're not dealing with ongoing costly surprises.

What is meant by the 20% down rule? ›

Typically, mortgage lenders want you to put 20 percent down on a home purchase because it lowers their lending risk. It's also a rule that most programs charge mortgage insurance if you put less than 20 percent down (though some loans avoid this).

What are the 3 main benefits of home ownership? ›

What are the perks of homeownership over renting? When it comes to buying a home, there are numerous perks that come along with just the house itself; financial stability, financial strength, tax deductions, a permanent home, and a sense of belonging in your community.

What are 3 benefits of owning property? ›

It offers financial security, stability, and the freedom to customize your living space. While there are many emotional benefits of owning a home, like having a yard for your kids to play or a private space to wind down, there are also financial and practical benefits.

What are 3 costs and benefits of home ownership? ›

The benefits of investing in a home include appreciation, home equity, tax deductions, and deductible expenses. Risks of investing in a home can include high upfront costs, depreciation, and illiquidity. A home can be a good long-term investment but building equity is key.

What is one positive thing about owning your own home? ›

You may get a tax deduction

One major tax benefit of owning a home is the mortgage interest deduction. Home mortgage interest is tax deductible, which could mean a reduction in federal taxes you owe.


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