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Written by David Dodge

With rising prices and unexpected expenses, buying a home in today’s market is more costly than many anticipate. New research from Clever Real Estate, based in St. Louis, Missouri, highlights the growing expenses faced by homebuyers beyond the traditional down payment. On average, homebuyers now spend an additional $31,975 on essential costs, which include closing fees, repairs, and moving expenses.

Breakdown of Extra Costs

The Clever Real Estate study identified the following expenses that contribute to the hefty price tag of homeownership:

• Repairs and renovations: $13,498
• Furniture, fixtures, and appliances: $6,446
• Closing costs: $4,754
• Seller concessions: $3,943
• Moving expenses: $2,670
• Private mortgage insurance: $387 (annually)
• Home inspection: $277

When combined with a 15% down payment on an average U.S. home priced at around $501,500, the total upfront cost for homebuyers is approximately $107,230.

Financial Strain for First-Time and Young Buyers

Many buyers, particularly first-time and younger buyers, are finding these extra costs surprising and financially straining. According to the study:

• 48% of buyers reported their expenses were higher than expected.
• 39% of buyers exceeded their initial budgets.
• Among Gen Z buyers, 49% went over budget, compared to only 31% of baby boomers.

Budget Compromises and Market Trends

To manage these costs, over three-quarters (79%) of buyers had to compromise on priorities, with 57% listing "staying within budget" as their top goal. Despite this, 11% of these budget-conscious buyers still ended up exceeding their limits. In 2024, more buyers successfully negotiated lower prices, with 34% paying below the asking price, a notable increase from 27% in 2022.

Rising Buyer Regrets and Future Cost Concerns

The financial demands of purchasing a home have led to buyer regrets. About 72% of buyers expressed regret, primarily due to the high overall costs. Many buyers felt unprepared, with 68% indicating they might have saved up to $24,000 if they had better understood these costs beforehand.

A recent ruling by the National Association of Realtors could soon add further expenses, shifting the buyer’s agent commission (potentially $12,944) to buyers rather than sellers, which may increase the overall financial burden for future buyers.

For a deeper dive into Clever Real Estate’s study, visit Clever Real Estate's research page.