Redfin Survey: Homebuyers Face Rising Mortgage Rates Head On

Just 5% would scrap their plans to buy if rates rose above 5%

SEATTLE, June 29, 2018 -- Few homebuyers are halting their searches in the wake of rising mortgage rates, according to Redfin, the next-generation real estate brokerage.

In May, Redfin commissioned a survey of more than 4,000 people who had bought or sold a home in the last year, attempted to do so, or planned to do so soon.

Among the more than 1,300 respondents who planned to buy a home in the coming year, just 5 percent said they'd call off their search if rates rose above 5 percent. Twenty-four percent of buyers said such an increase would have no impact on their search. These results are consistent with those from similar surveys Redfin commissioned in May and November of 2017.

"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."

More willing to adjust criteria, slightly less urgency:

Here's how buyers said they would react if mortgage rates were to rise above 5 percent:

• 32% would slow down their search and wait to see if they came back down again, up from 27% in November and 29% in May 2017.
• 21% said a 5% mortgage rate would cause them to look in other areas or buy a smaller home, unchanged from November and up from 18% a year ago.
• 19% would increase their urgency to buy before rates went up further, down from 21% in November and from 23% a year ago.

To read the full report, complete with charts and a methodology, please visit:
https://www.redfin.com/blog/2018/06/redfin-survey-rising-mortgage-rates.html

About Redfin

Redfin is the next-generation real estate brokerage, combining its own full-service agents with modern technology to redefine real estate in the consumer's favor. Founded by software engineers, Redfin has the country's #1 brokerage website and offers a host of online tools to consumers, including the Redfin Estimate, the automated home-value estimate with the industry's lowest published error rate for listed homes. Homebuyers and sellers enjoy a full-service, technology-powered experience from Redfin real estate agents, while saving thousands in commissions. Redfin serves more than 80 major metro areas across the U.S. The company has closed more than $60 billion in home sales.