Redfin’s latest Real-Time Homebuyer Survey reveals that rising mortgage rates are having a significant impact on homebuying decisions. While homebuyers continue to be frustrated by low inventory, this quarter they were nearly equally concerned with rising mortgage interest rates. Respondents blamed higher rates for harming their ability to buy a home and for changing the pace of their home search. Also, buyer expectations that prices will continue to rise dropped sharply this quarter. A further indication that the market is becoming more balanced, fewer buyers believe now is a good time to buy a home. At the same time, fewer believe now is a good time to sell.
Here’s what buyers told us this quarter:
- Rising mortgage rates are making it harder for would-be buyers to afford a home: A total of 63 percent of respondents said that rising mortgage rates this summer have negatively impacted their ability to buy a home.
- Rising mortgage rates are causing some buyers to speed up, others to slow their search: Thirty-three percent of respondents said that the rising level of mortgage rates this summer led them to increase the pace of their home search while 20 percent have slowed their pace. One percent reported that higher rates stopped their search altogether.
- Homebuyers believe that the market may be shifting from seller control: Buyers who believe now is a good time to sell in their neighborhood fell to 63 percent from 66 percent last quarter, marking the first drop in three quarters.
- Homebuyers are most worried about low inventory, rising mortgage rates: Low inventory remains a key concern for buyers at 58 percent, down eight points from 66 percent last quarter. Respondents cited rising mortgage rates, a new question, as their second largest concern at 53 percent.
For the full report including data tables and charts, visit the Real-Time Market Sentiment in Redfin’s Research Center.