What Trade-Offs Will Buyers Make to Afford a Home?
As home prices grow more out of reach for would-be buyers, many find themselves making tradeoffs in order to secure a mortgage. Property data provider Cotality recently surveyed prospective buyers from across five markets to determine what it would take for them to come back to the housing market.
Some buyers are still waiting for lower mortgage rates
For many would-be buyers, current mortgage rates are too high to consider purchasing a home. When asked what rate would bring them back to the market, the median rate in the U.S. is 4.6%. Gen Z, however, has slightly lower expectations, saying they’ll accept mortgage rates of 4.9%.
Interest rates in the U.S. aren’t going to dip down to the levels people want for at least another three years. Expectations set by Covid-era interest rates have stagnated the market and sidelined millions of would-be homeowners.
- Selma Hepp, chief economist at Cotality
Gen Z is willing to make trade-offs no matter the mortgage rates
Many buyers are also willing to make major tradeoffs to purchase a home. Of those surveyed, 69% of all buyers say they would cut lifestyle spending, but that number increases to 78% for Gen Z buyers. Similarly, 74% of Gen Z buyers say they will accept a smaller home in exchange for a mortgage, compared with 59% of buyers overall.
About the Author
Catherine Sweeney, Content Strategist/Staff WriterCatherine Sweeney, Content Strategist/Staff Writer
Catherine Sweeney is a content strategist and staff writer for Pro Builder and Custom Builder Online, with a focus on design trends, new products, and environmental issues. Contact her at csweeney@endeavorb2b.com.