Homebuyers Cite Rising Prices as Top Concern, Plan to Lower Target Price Range if Rates Top 5%
SEATTLE–The vast majority of homebuyers expect mortgage rates to rise in the coming months, but just 6 percent consider rates a top concern, according to a survey of more than 1,100 homebuyers conducted by Redfin (www.redfin.com), the next-generation real estate brokerage. Instead, buyers today are worried about rising home prices (26%), low inventory (16%) and competition (11%).
By and large, the idea that mortgage rates are about to rise isn’t what’s driving people to buy a home now. Fewer than 7 percent of respondents said they were buying now to get ahead of mortgage rates, while 24 percent cited life events and 21 percent rising rent costs.
When asked how they’ll react if rates reach 5 percent, 47 percent of respondents said they would look for a less-expensive home, 22 percent would save for a larger down payment, 17 percent wouldn’t change a thing and just 14% would give up on buying a home for now.
One group of buyers—those shopping for the least-expensive homes—is worried about rising rates. Almost seven in 10 people looking to buy a home for $250,000 or less said mortgage rates are important in their home-buying decisions.
While some Redfin agents have been working this past week with buyers eager to lock low rates in now, most say their customers are more worried about what will happen with home prices in the coming months.
“None of my homebuyers have mentioned anything concerning rising interest rates. And I really mean that, not a word,” said Redfin agent Christopher Johns in Houston. “They’re more concerned that they get a good deal, so they’re protected if prices fall.”
About the survey
Redfin’s survey was conducted between Nov. 15 and 18, collecting responses from 1,146 homebuyers in 35 states and Washington, D.C. To read the full report, please visit: https://www.redfin.com/blog/2015/12/whats-spooking-homebuyers-hint-its-not-the-fed.html.
About Redfin
Redfin is a next-generation real estate brokerage that represents people buying and selling homes. Founded by technologists, Redfin employs a team of experienced, full-service real estate agents who are advocates, not salespeople, earning customer-satisfaction bonuses, not just commissions. Redfin.com features all the broker-listed homes for sale, as well as for-sale-by-owner properties that don’t pay brokers a commission. Redfin also offers online tools, built by its own software engineers, that make the entire process of buying or selling a home easier and more fun. The company serves major markets across the U.S. and has closed nearly $20 billion in home sales. In 2012, Redfin was named one of The DIGITAL 100: World’s Most Valuable Private Tech Companies by Business Insider.
