Homebuyers Say That They Will Deal With Mortgage Rate Increases

Dec. 21, 2016

Rising mortgage rates will cause only a small percentage of potential buyers to fully give up a search for a house, according to a new survey.

Redfin polled 934 people who said they planned to buy a home within the next year, asking them what their plans would be if mortgage rates rose above the current 4 percent. Only 2.6 percent of respondents would cancel plans to buy a home. Another 25.8 percent said that they would slow down a search to see if rates fall. A quarter of respondents said that rising rates won’t affect their search at all.

Why are homebuyers so resilient? While there’s no definitive answer, often homebuyers are searching for a new home because of a major life event, such as a birth or a marriage or a job relocation, which can’t easily be timed to the market — but which still motivates a purchase along its own timeline. And while rates have climbed, they’re still historically low, which many homebuyers realize.

Read more

Sign up for Pro Builder Newsletters
Get the latest news and updates.