Realtor June 21, 2024
Buyer
Home buyers are facing a number of challenges this spring, as mortgage rates and home prices remain elevated and new listings remain low. These frustrations are being felt by home shoppers, but hope is not lost, according to a new survey from Realtor.com® and Censuswide. While more than three quarters (78%) of home shoppers expect to be priced out of the market if prices and rates continue to rise, 88% of active home shoppers say that they still hope to buy a home this year, even though rising prices and high interest rates have made it much more difficult.
According to Realtor.com® Chief Economist Danielle Hale, “The good news for home buyers is that price growth has slowed to a crawl, and we may even see list prices drop within the next couple months. With inflation slowing, it’s also possible that we’ve reached the end of the Fed’s tightening cycle, which could mean that mortgage rates have reached their peak, at least in the short-term. This would be a welcome relief for buyers who have been feeling like they might be priced out of the market.”
Home buyers are facing mixed emotions when it comes to the current housing market. On a positive note, 51% said buying a home will be exciting and 40% said it will be fun. On the other hand, 25% think it will be stressful, 23% time consuming and 15% said it will be more difficult than ever. In terms of feasibility, 38% said it will be challenging but possible,15% said it will be nearly impossible and just 8% said that it will be impossible.
A number of external factors have home shoppers second-guessing their decision to buy and 91% of respondents said that this is the case. These factors include:
More than 3 in 5 respondents (62%) not planning to buy a home within the next year cited financial considerations as the impediment. When asked at what mortgage rate they would feel comfortable jumping in (or back in) to the housing market, the most popular response was 3% – 3.25%, with 11% of respondents saying this is the sweet spot for rates. The second most common response was a more realistic 6.1 – 6.25%, with 10% of respondents picking this range. Overall, responses varied greatly, suggesting that people don’t know what’s going to happen with mortgage rates.
Unfortunately, Realtor.com® economic data analyst Hannah Jones doesn’t expect rates to return to the historic lows we saw during the pandemic.
“As the economy has changed, so has the mortgage market and it’s not realistic that we’ll see rates return to the 3% range. However, it is possible that we’ll see rates return to the low 6’s next year, which could be when we’ll see a lot of buyers jumping back into the market,” she said.
Mortgage loans and rates can seem intimidating when looking at homes for sale. With interest rates changing weekly, our mortgage calculator can help you calculate estimated monthly payments and rate options for a variety of loans, and it’s easy to use, and even easier to understand.
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