Hippo set out to learn how homeownership is affecting people's overall quality of life following the massive shift in home buyer trends—driven by a hot housing market and the pandemic—in 2020 and 2021.
We ran a national survey of more than 1,000 homeowners, and found that homeowners feel a significant lack of preparedness after purchasing their homes. These findings reveal insights into the emotions and challenges that new homeowners faced over the past year, including many who rushed into home purchases to take advantage of historically low-interest rates.
One of the key insights is just how underprepared new homeowners felt as they entered their new homes and readied themselves for mortgage payments and home maintenance responsibilities. Beyond the paperwork and moving boxes is a whole new world for many first-time homeowners.
While new buyers recognize the importance of home maintenance, many of them said they didn’t have the foresight and know-how needed to handle unexpected costs. Despite the fact that 51% of home buyers said they felt very prepared for homeownership before they made the leap and purchased their home, 26% found that they were much less prepared than they initially thought. First-time homeowners jumped in headfirst, and many faced unexpected repairs and surprises in their first year.
The financial and emotional value of homeownership
Owning a home can be one of the most formative, impactful experiences in someone’s adult life. Many people think of homeownership as a rite of passage, and for many people, a home is their most prized asset in their financial portfolio.
However, what may start off as an exciting new chapter for most new homeowners can quickly turn into a stressful, frustrating journey. Unexpected challenges and unforeseen costs can strain a homeowner’s personal relationships, finances and mental well-being.
What our research found
Buying a home is decidedly exciting, but our survey found that 77% of homeowners dealt with an unexpected issue that needed repair within the first year; 53% of those homeowners said the cost of those repairs ranged from $1,000 to $5,000.
Many first-time homeowners have a difficult time understanding and caring for their new spaces. Some have a tough time locating the main water shut-off valve, figuring out what to do with the fusebox or identifying the source of water leaks, for example. To put this into perspective, the Environmental Protection Agency reported that households in the United States can face up to one trillion gallons’ worth of leaks per year.
Fortunately, there’s a simple fix. Taking the time to familiarize yourself and your household with the features of your home can help prevent damage from occurring in the first place. At the end of the day, getting to know every part of the home can make you more confident and competent in caring for your home properly.
Despite these initial frustrations, the majority of homeowners we surveyed are still happy with their home purchase and the lifestyle it has afforded them, partly because becoming a homeowner helped people develop healthier habits.
A new set of factors are influencing home buying
The new home buyers dominating the market are approaching homeownership in a whole new way than prior generations. Due to recent changes to the economy—think: record-low mortgage rates and above-average asking prices as a result of the coronavirus pandemic—new home buyers are making different choices in the home buying journey. In addition to considering larger economic factors, finding new sources of information and using technology to research and bid on homes, many new home buyers are considering buying alone or with an unmarried partner, friend or family member.
Economic changes aren't the only new factor, though. Climate change is also an increasingly important consideration. Prospective home buyers have to think about how climate change is affecting their dream home’s location now and in the long-term future. The Hippo 2021 Homeownership Report found that first-time homeowners were 318% more likely than existing owners to say that climate change considerations factored into their home buying decision.
Where, how and why homeowners are seeking support
Owning a home can be intimidating. A quick google search shows that there are more resources available to people looking to buy a home than there are for people who’ve already made a purchase and want further education in homeownership. Our surveyed homeowners indicated that the lack of trusted resources available actually decreased their confidence as homeowners.
First-time homeowners are the most affected by the lack of resources (with 20% more of this group reporting lower levels of confidence), but experienced homeowners are also affected. Nearly three-quarters (74%) of the millennial homeowners we surveyed said they crave homeowner education the most, but the Gen Xers and Boomers aren’t far behind: with 63% of Gen Xers and 42% of Baby Boomer homeowners are actively seeking better homeowner education. So, where are they turning for this education?
Where homeowners can improve
There’s a lot that goes into making your house a comfortable living space. Every room, floor and corner has its own unique purpose. Despite all the ups and downs homeowners may experience after they’ve taken ownership of their new homes, they’re still eager to improve their knowledge on homeownership, so they can reach their household goals.
Setting home-related resolutions
In reviewing the findings of the Hippo 2021 Homeownership Report, the one theme that was very apparent throughout was the overwhelming sense of optimism among homeowners. People are grateful for their homes and eager to gain experience and continue improving their spaces.
To do that, many homeowners are setting goals. Nearly half (42%) of our survey respondents said they’re planning to set a New Year’s resolution related to their homeownership journey, and we want to encourage you to do the same! You may want to set money-saving goals, try to learn more about your home’s basic needs or consider which smart home trends you want to adopt.
At Hippo, we aim to take a holistic approach to support homeowners on their journey of homeownership. We do our best to meet consumers where they are, which means we’re constantly looking for ways to support prospective home buyers and help current homeowners find the tools and information they need to protect and enjoy their homes. Whether you’re a Hippo customer or not, we’re here for you.