The True Cost of Buying a Home in 2024

Home-Buying Costs | Commission Costs | Renovation Costs | Closing Costs | Concession Costs | Additional Costs | Home-Buying Costs With Down Payment | Sticker Shock | Negotiations | Priorities vs. Compromises | Home-Buyer Regrets

When shopping for their home, many buyers fixate on the listing price while overlooking significant fees and expenses that can add tens of thousands of dollars to the upfront cost. 

In addition to their down payment, Americans report spending $31,975 on upfront home-buying expenses — an amount that surprised 48% of buyers, according to a new survey from Clever Real Estate. 

To learn more about how finances impact Americans' home-buying decisions, we surveyed 1,000 people who have purchased a home since 2022. 

With high home prices and interest rates limiting buyers' budgets, we found that buyers regret not leveraging their growing power in the market to save on their purchase. Overall, 72% of buyers have regrets about their home-buying experience. 

If they could do it over, 68% would have made different decisions. With a different approach, buyers think they could have saved $24,000 on average. 

Keep reading to learn more about the true cost of buying a home in a market that still slightly favors sellers.

Home Buyers Spend More Than $30,000 in Extra Costs on Top of Their Down Payment

A down payment is the most significant and expensive part of purchasing a home, but it's not the only upfront cost buyers will encounter. Home shoppers spend an average of $31,975 on home-buying expenses on top of their down payment.

The cost of buying a home can depend on a variety of factors, but in general, homeowners spend the following amount on these expenses:

• Repairs and renovations: $13,498
• Furniture, fixtures, and appliances: $6,446
• Closing costs: $4,754
• Concessions to seller: $3,943
• Moving costs: $2,670
• Private mortgage insurance: $387 annually
• Home inspection: $277

With the addition of these expenses to their down payment, the upfront costs of buying a home can start to snowball and take buyers by surprise. Nearly half (48%) say the cost of purchasing their home was higher than expected. 

However, 78% of respondents were still satisfied with the final price of their home — indicating that a home purchase is still worth the investment to a majority of buyers.

Commission Costs: Buyers Could Be Responsible for Nearly $13,000 in Realtor Fees

With buyers waiting more than a decade between home purchases, most need a real estate agent to guide them through the complicated, unfamiliar process. In fact, 89% of buyers purchased their home through an agent in 2023 — the last full year for which data is available.

In the past, the home seller would traditionally pay the agent's commission cost for the buyer. But in August, a legal settlement with the National Association of Realtors took effect, making buyers — not sellers — responsible for determining how their agent is paid. 

In practice, however, many sellers continue to pay for agent commission to attract qualified buyers and lead to a faster sale. Nearly 2 in 3 buyers (66%) who used an agent in 2024 say the seller paid for some or all of their agent's commission.

If buyers had to pay their agent's average commission rate of 2.58% entirely out of pocket, that would add about $12,944 in extra expenses on the average-priced U.S.  home — bringing the total upfront home-buying cost to $44,919 on top of the down payment.

Renovation Costs: Buyers Spend More Than $13,000 on Home Improvements in Their First Year of Ownership

With home prices still near record highs, buyers may choose to purchase a fixer-upper for a chance to secure a home at a lower upfront cost. About 62% of home shoppers report buying their home as-is, meaning the seller did not make any significant changes or improvements before listing. 

As-is properties can be a bargain for buyers on a budget, but many of these homes need a lot of work to modernize outdated systems or features. About 81% of home buyers say they made repairs or improvements on their home within one year of purchasing it. 

The most common upgrades include:

• Painting or staining (36%)
• Major appliance repair or replacement (31%)
• New landscaping or fencing (27%)
• Plumbing updates (23%)
• New or refinished flooring (18%)
• Electrical updates (18%)

Repairs and improvements can increase a home's value and make it more comfortable, but even seemingly affordable projects can add up. Home buyers spent an average of $13,498 to repair and improve their home in the first year of owning it, which was more than 42% expected to spend. 

After spending so much on other home-buying costs, many homeowners prioritized less expensive projects to start their remodel. About 27% of buyers improved their landscaping, and 23% improved their plumbing — the two least costly repairs on the list. 

The most costly repairs were a kitchen remodel and basement remodel, which only 12% and 4% paid for, respectively.

Homeowners may think spending more money on major renovations will lead to a higher resale value, but minor renovations often have a better return on investment. For example, homeowners who complete a major upscale kitchen remodel recoup just 38% of the cost. 

Closing Costs: Sellers Pay Almost $5,000 in Final Transaction Fees

Most buyers know they have to pay closing costs when purchasing a home, but few realize just how expensive they can be. The average buyer spends about $4,754 on closing costs — a surprise to 45% of buyers.  

Like everything in real estate, though, buyers can negotiate who pays their closing costs. Nearly 1 in 4 buyers (24%) asked the seller to pay for some or all of their closing expenses. Of those who were successful, sellers chipped in roughly $4,752. 

But not all buyers are so lucky. The majority are still on the hook for closing costs — even if few know what they're actually paying for.

Closing costs include a multitude of expenses, such as title fees, appraisal fees, credit fees, and loan application fees. But 1 in 7 buyers (14%) couldn't name a single closing expense they paid for. 

Concession Costs: Buyers Pay Nearly $4,000 in Seller Concessions

With demand for homes outpacing supply, sellers still have the upper hand in the real estate market. To make their offer more enticing, 72% of buyers offered at least one concession to the seller. 

Buyers were most likely to:

• Pay the full asking price (28%)
• Buy the home as-is (24%)
• Agree to a flexible closing date (18%)
• Pay for repairs themselves after the inspection (14%)
• Move into the home later than desired (13%)

Although some concessions require a sacrifice of only time and convenience, others have a real monetary cost. Buyers paid an average amount of $3,943 in concessions to the seller. 

The most costly concessions included paying some or all of the seller's closing costs and paying more than the appraised value of the home. 

Buyers can offset some of these costs by asking for concessions from the seller, who may offer incentives to close a deal more quickly. If they could do it over, about 1 in 7 buyers (15%) would ask for more concessions from the seller.

Miscellaneous Home-Buying Expenses Cost About $10,000

Some home-buying costs are expected, but there are a variety of miscellaneous expenses that buyers should factor in to their budget as well.

Although it's not required, most buyers pay for a home inspection to help them identify safety hazards and repairs they can later negotiate with the seller. 

The price of a home inspection varies widely depending on the size and location of a home, but buyers say they paid about $277 on average. Home inspections aren't full proof, however, and nearly 1 in 4 buyers (22%) say their inspector missed problems that ended up costing them money. 

Once buyers are satisfied with a home's condition, the sale can proceed into the closing stages, which may include an appraisal and mortgage underwriting.

Most buyers purchase their home with a mortgage, but if they finance more than 80% of the sale price, they'll have to pay for private mortgage insurance, which protects the lender in case of default.

Nearly 1 in 4 respondents (21%) report paying PMI, with those buyers saying it adds about $167 on average to their monthly payment. That racks up about $2,004 a year in additional mortgage expenses.  

Even after closing, the expenses don't stop there. Most buyers must pay to relocate, which costs about $2,670, on average. Once they move in, they may also need to furnish the home with appliances and fixtures if they weren't included in the sale. Those costs average $6,446.

A Down Payment Adds $75,000 to Upfront Home-Buying Costs

In addition to these upfront home-buying expenses, buyers will, of course, need to put money down on their home. 

Saving for a down payment is one of the biggest barriers to homeownership, with 55% of respondents saying they spent two years or more saving for one. 

Buyers were most likely to save for a down payment by:

• Setting aside a portion of their income (48%)
• Taking from investments (17%)
• Using money from an inheritance (14%)

Even then, nearly 1 in 5 homeowners (18%) say they put down less on their home than they originally planned. Although 20% is traditionally recommended, the average down payment is only 15% among all buyers, and 8% among first-time buyers. 

A 15% down payment on the average-priced U.S. home adds an extra $75,255 in upfront home-buying costs, bringing the total to $107,230.

State and federal assistance programs can help lower the cost of purchasing a home by allowing buyers to put down as little as 3.5%. But fewer than 1 in 10 buyers (9%) used a down payment assistance program. 

Younger generations with limited savings were more likely to take advantage of these programs, with 23% of Gen Z saying they used down payment assistance, compared to 9% of all buyers. 

Down payment assistance programs may lower the upfront costs of home buying and help young home shoppers enter the market sooner, but they ultimately lead to greater interest payments in the long run. 

At the current interest rate of 6.44%, buyers who put down only 3.5% on the average-priced home pay $610,627 in interest on a 30-year mortgage, compared to $537,857 among those who put down 15% and $506,219 among those who put down 20%.

Almost Half of Home Buyers Were Surprised by the Additional Costs of Buying a Home

The cost of buying a home isn't always clear, leaving some unsuspecting buyers with sticker shock. Nearly half of buyers (47%) were surprised by the additional costs of purchasing their home beyond the sale price. 

With so many costs exceeding buyers' expectations, 39% say they went over budget on their home purchase and 38% say it affected their ability to maintain their savings or emergency fund.

Unsurprisingly, Americans with the least home-buying experience were the most likely to be shocked and unprepared for the true cost of purchasing a home. 

Although just 38% of repeat buyers were surprised by the costs, that number jumped to 63% among first-time buyers, which includes many young Gen Zers. 

A whopping 70% of Gen Z were surprised by the additional costs of buying, with 49% saying they went over budget and 55% saying it affected their ability to maintain an emergency fund. 

Respectively, that's more than 1.5x and 2x the number of boomers who say the same.

94% of Buyers Successfully Negotiated at Least One Aspect of Their Sale

With power shifting back toward buyers in the market, home shoppers facing higher-than-expected prices can negotiate with sellers to make purchasing a home more affordable. 

More than half of home buyers (52%) say they negotiated with the seller. Of those who attempted to negotiate at least one aspect of the sale, 94% reported success. 

Buyers were most likely to negotiate the sale price of the home, with 75% of respondents who negotiated saying they attempted to haggle with the seller over the cost. Of those who did, 72% reported that the seller complied.

In general, 34% of all buyers ended up paying below the asking price in 2024 — a slight increase from 2022, when only 27% of buyers paid below asking price in the strong sellers' market. 

Meanwhile, recent buyers who paid above the asking price dropped from 23% in 2022 to 17% in 2024 as high interest rates make it more difficult for buyers to splurge on a home.

Haggling over the price might be the most common negotiation, but it's not the most successful. 

Buyers who asked the seller to pay for their agent's commission found the most success. Although only 6% of buyers attempted to negotiate this item, 93% of those who tried say the seller agreed to their terms. 

Besides commission costs, buyers found the most success negotiating for:

• Appliances and furniture included in the sale (91%)
• Credits for cosmetic upgrades (89%)
• Repairs needed before closing (83%)
• Seller-paid points to lower the mortgage interest rate (82%)
• Financial help with closing costs (77%)

Buyers had the toughest time negotiating for repairs to major systems, such as the HVAC or plumbing. Of the 8% who tried, just 44% successfully negotiated any upgrades.

Negotiations aren't always successful, but at the very least, it's worth starting a conversation that could yield significant savings or more favorable terms. In the end, 48% of buyers wish they had negotiated more with the seller.

79% of Buyers Compromised on Their Priorities

Very few Americans walked away from their home negotiations with everything they wanted, leading 79% of buyers to compromise on at least one priority.

Home shoppers prioritized buying within their budget above all else, but unfortunately, it was the priority most likely to be compromised. Of the 57% who said it was important, 11% went over budget. 

Buyers had better luck finding the right-sized home, but it was still the second-most compromised priority. About 46% of Americans wanted to buy a home with a specific square footage, but 5% had to compromise. 

Another 5% had to endure a longer home-buying process than expected, despite 25% prioritizing a quick purchase.

Ultimately, more than 1 in 3 buyers (35%) did not end up purchasing their favorite home during the search and had to settle for a different property.

Nearly 3 in 4 Buyers Have Regrets About Their Purchase

Compromising on their priorities inevitably led to regret among homeowners, with 72% expressing remorse about some aspect of their home-buying experience.

More than 1 in 6 homeowners (17%) say the overall cost of buying a home was just too expensive, making it the most common regret. 

Sellers also have a host of other regrets about price, such as: 

• Underestimating post-purchase expenses (16%)
• Failing to negotiate enough with the seller (16%)
• Paying too much for their home (15%)
• Choosing the wrong home (14%)

Buyer's remorse is a common feeling, especially when it stems from ongoing financial strain caused by underestimating costs. Had they known the true cost of buying a home, 68% of buyers would have taken a different approach. 

In hindsight, buyers would have taken steps to mitigate their current regret:

• With 16% of buyers saying they failed to negotiate enough with the seller, 25% say they would negotiate more.
• With 15% saying they paid too much for their home, 20% would make a lower offer.
• With 14% saying they chose the wrong property, 17% say they would look at more houses during their search.
• With 16% saying they underestimated post-purchase expenses, 16% would plan for higher post-purchase expenses.

Had they approached the buying process differently, buyers think they could have saved an average of $24,000.

Methodology

Clever Real Estate surveyed 1,000 American adults who recently purchased a home to ask them about their home-buying experiences and costs. This survey was conducted Sept. 26-27, 2024. Additional data was sourced from the National Association of Realtors, Redfin, and our average commission survey.

About Clever

Since 2017, Clever Real Estate has been on a mission to make selling or buying a home easier and more affordable for everyone. 12 million annual readers rely on Clever's library of educational content and data-driven research to make smarter real estate decisions—and to date, Clever has helped consumers save more than $160 million on realtor fees. Clever's research has been featured in The New York Times, Business Insider, Inman, Housing Wire, and many more.

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