Almost half of potential home purchasers in a recent survey would likely accelerate their activities if mortgage rates reach 3.5%, but a scant few would cancel their plans, Redfin found.
The average for the 30-year fixed rate mortgage reached
"Over time, that will put the brakes on demand and put an end to double digit
Of the 1,092 survey respondents planning to buy a home in the next 12 months, 47% probably would act with more urgency to enter the housing market if rates continued increasing. Another 29% would plan to either look at a less expensive location or consider buying a smaller house.
Delaying their activities and waiting for a drop in mortgage rates is the action for 14%, but 7% said they would not change their plans. Only 2% would ditch the decision to buy a home in this scenario.
The survey was conducted for Redfin by Lucid between Dec. 10 and Dec. 13.
In a separate December survey from Fannie Mae, 66% of consumers said it's now a bad time to purchase a home, up 2 percentage points
"Among homeowners, the 'good time to buy' sentiment fell 30 percentage points over the past year to its current level of 30%; for renters it fell from 37% to 21%," Fannie Mae Chief Economist Doug Duncan said in the press release for the latest Home Purchase Sentiment Index. "Even though demand remains strong, a majority of consumers clearly have reservations about purchasing a home at current prices."
Over half of the respondents, 56%, said they expect mortgage rates to rise over the next 12 months, while 30% believe they would remain the same. Just 4% predicted rates may decrease.
The Fannie Mae National Housing Survey was conducted from Dec. 1 through Dec. 17.
