Rising Mortgage Rates Won't Spook Buyers
Mortgage rates are likely to rise in the coming weeks and many housing experts have warned that the rises will likely shake the housing market as borrowing costs get more pricey. But the fear of rising rates isn't concerning home buyers yet, according to a new consumer survey by the real estate brokerage Redfin.
Rising mortgage rates barely appeared in list that ranked the top buyer concerns. In fact, just five percent of consumers surveyed said their buyer concern was that "mortgage rates will go up before I can buy." But buyers showed much more fear over home prices rising too high (27 percent); too much competition from other buyers (17 percent); not enough for-sale homes to choose from (14 percent); having to sell a home first (8 percent); and not having enough saved for a down payment (6 percent).
Almost 72 percent of purchasers as of late studied say they expect interest rates to rise in the next six months. But fewer than 7 percent of potential home buyers said they were in a hurry to purchase a home before mortgage rates rose, according to the Redfin survey. Instead, buyers said they were more motivated to buy because of a new child, marriage, or other life event (26 percent); rent fatigue (13 percent); and a belief that real estate is a good investment (10 percent).
If mortgage rates rise to 5 percent or more, consumers say they may just adjust what they're looking for but it won't make them not buy. Forty-four percent of consumers surveyed say that rates spiking to 5 percent or more would make them want to look for a cheaper house or 21 percent say they would save for a larger down payment then. Only 15 percent said mortgage rates that rose by that much would make them no longer want to buy a home.