Few home buyers are halting their searches in the wake of rising mortgage rates, according to an analysis out Friday from Redfin.
In May, Redfin commissioned a survey of more than 4,000 people who had bought or sold a home in the last year, attempted to do so, or planned to do so soon.
Among the more than 1,300 respondents who planned to buy a home in the coming year, just 5% said they’d call off their search if rates rose above 5%. Twenty-four percent of buyers said such an increase would have no impact on their search. These results are consistent with those from similar surveys Redfin commissioned in May and November of 2017.
“Home buyers are well aware that higher mortgage rates means higher monthly payments, but mortgage rates remain very low, historically, and buyers will make compromises,” said Taylor Marr, senior economist at Redfin. “Most of the pressure buyers are feeling is from competition for a very limited number of homes for sale. The fact that such a small share of buyers will scrap their plans to buy a home if rates surpass 5% reflects their determination to be a part of the housing market.”
Here’s how buyers said they would react if mortgage rates were to rise above 5 percent:
- 32% would slow down their search and wait to see if they came back down again, up from 27% in November and 29% in May 2017.
- 21% said a 5% mortgage rate would cause them to look in other areas or buy a smaller home, unchanged from November and up from 18% a year ago.
- 19% would increase their urgency to buy before rates went up further, down from 21% in November and from 23% a year ago.
