Last week, rates for a 30-year-fixed mortgage crept up to 4.08 percent, according to the most recent numbers released by Freddie Mac. That’s an increase of a little over half a percent in just three weeks, and the highest rate seen since July of 2015.
How will homebuyers react? A Redfin survey in early November asked just that. The majority of homebuyers said that rates were “very important” or “important” in their decision to buy, according to a survey of 2,415 users of Redfin.com who said they would buy a home soon, or were currently under contract.
How important are mortgage rates in your decision to buy?
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Nearly half of respondents said that if rates increased a point or more, they’d look for a less expensive home, while only 7.5 percent said they’d give up on their search.
If rates increased by a point or more, how would it affect your decision to buy?
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Rates have only increased half a point since the question was asked, but the decision to purchase a home is often related to more than just the prevailing economic conditions.
“Most buyers are looking for a home because of their personal economy, such as an expanding or shrinking family, or a job relocation, rather than only because of the broader economy,” said Redfin real estate agent Danielle Field in Louisville. “Yes, a few people will be kept from the market because of interest rates, but for many people moving homes just isn’t something you can time to the market like the buying or selling of a stock.”
While low rates are nice, a hike likely isn’t enough to toss most people out of the market entirely, particularly when rates remain low by historical standards.
About the Survey
This Redfin survey was conducted between November 7 and 11 and includes responses from 2,415 users of Redfin.com in 38 states and Washington, D.C, all of whom confirmed that they had recently or were planning to buy a home.
Specifically, only responses were considered from respondents who said one of the following when asked “Are you planning to buy a home?”: “Yes, I am under contract,” “Yes, in less than 3 months,” “Yes, in the next 3-6 months,” or “Yes, in the next 7-12 months.”
