Rates may be on the rise, but 95% of prospective homebuyers say they won't give up the search
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Mortgage rates have been on the rise, but that’s not stopping prospective homebuyers, according to a new survey.
Online brokerage Redfin recently surveyed more than 4,000 people who had bought or sold a home in the last year, attempted to do so, or planned to do so soon. Among the more than 1,300 respondents who planned to buy a home in the coming year, only 5% said they’d stop looking if mortgage rates rose above 5%. Twenty-four percent of buyers said that such an increase wouldn’t impact their search at all, according to Redfin.
“Homebuyers are well aware that higher mortgage rates mean higher monthly payments, but mortgage rates remain very low, historically, and buyers will make compromises,” said Taylor Marr, senior economist for Redfin. “Most of the pressure buyers are feeling is from the competition for a very limited number of homes for sale. The fact that such a small share of buyers will scrap their plans to buy a home if rates surpass 5% reflects their determination to be a part of the housing market.”
Here’s what the survey found about how buyers would react if rates passed 5%:
- 32% would slow down their search and wait to see if rates fell again
- 21% said a 5% mortgage rates would cause them to look in other areas or buy a smaller home
- 19% would increase their urgency to buy before rates rose even higher
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