As mortgage rates rise, many homeowners are rethinking whether or not they will stay in their homes or move. New survey data show that home sales will be 13 percent lower with a 1 percent rate increase.
In a new survey from John Burns Real Estate Consulting, homeowner respondents were asked if they would sell or stay if rates were 1 percent higher than their current mortgage rate. While 40 percent would still move, 60 percent either considered staying, or would definitely stay. JBREC concludes that while the 13.3 percent drop in sales volume is higher than expected, it is still smaller than other experts predicted. In 2018, year-over-year new home sales rates per community declined each month so far, and the consulting firm cites rising rates as a primary cause.
With 56 percent of all transactions reportedly purchased by people who previously owned a home and 24 percent of those homeowners saying they would definitely not move if they had to get a mortgage with a 1 percent higher rate, we calculated a sales volume decline of 13.3 percent. Another 36 percent said they may not move, so we assume some of these homeowners will stay put due to rising rates. Our survey also shows that older respondents were more likely to be less impacted.
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