Rising Rates No Match for Buyer Desire

Mortgage rates may be rising past 4.5 percent, but that's not stopping home shoppers. If rates surpass five percent, only five percent of survey respondents say they would stop looking.

A survey of more than 4,000 homebuyers and sellers from the past year are still trying to, or have bought or sold their home despite the rate increases, per Redfin. Thirty-two percent say they would slow their roll, so to speak, and wait to see if rates dropped again, which is a higher share than in survey results from last year. Twenty-one percent say they would look at smaller homes, or homes in a smaller area with rates over five percent, and 19 percent say they would speed up their search.

“Homebuyers 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 percent reflects their determination to be a part of the housing market.”

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