Ascending mortgage rates are starting to weigh on homebuyers nearly as much as low inventory, according to Redfin’s most recent Real-Time Homebuyer Survey.
For its report, Redfin surveyed 1,772 active homebuyers across the 22 markets it covers. Respondents hailed from all over the country.
Out of those polled, 56 percent said rising rates have impacted their ability to buy a home “somewhat,” while an additional 7 percent said rates are impacting them “a lot.” When asked how rates have affected their home search, 33 percent said they’re speeding up their search before rates get too high, 20 percent said they’re slowing their search, and 1 percent have stopped looking altogether.
In addition, more homebuyers pointed to rising mortgage rates as one of their major concerns with buying a home right now, with 53 percent giving that response. However, inventory shortage was still the chief concern, earning 58 percent of responses.
At the same time, when asked about their motivation for buying a home this year, only 37 percent of buyers cited low mortgage rates, down from 56 percent last quarter. Thirty-eight percent answered “life event,” 33 percent said “rising costs,” and 25 percent said they are “tired of waiting.”
On the positive side, buyers seem to believe the market is shifting back toward a balance. The share of buyers who believe now is a good time to sell in their neighborhood fell to 63 percent from 66 percent in the last survey, marking the first drop in three quarters.
Still, though, only 24 percent of buyers said now is a good time to buy, a drop from 32 percent in the last survey.
Finally, home price expectations were a little more muted than they have been in past surveys. Thirteen percent of respondents said they expect home prices in their area to “rise a lot” over the next year, down from 23 percent in the prior survey. Just more than half (51 percent) expect prices to “rise a little” (down from 57 percent).
By Tori Barringer