The housing market has been through ups and downs in recent years, with prices reaching record highs and then falling sharply during the recession.
Now, there are indications that the market is on the rebound, but there is one potential obstacle that could stand in the way of sustained recovery: higher mortgage interest rates.
Rates have already begun to rise from their historic lows, and if they continue to go up it could make buying a home more difficult for some buyers and lead to fewer sales.
Of course, higher mortgage rates can also be good for the housing market in some ways.
For example, they can spur people who have been sitting on the sidelines to buy before rates get even higher.
And, they can lead to more refinancing activity, which can put more money in homeowners’ pockets that they can then use to make improvements or pay down debt.
So, What Does The Future Hold For Mortgage Rates?
No one knows for sure, but if you’re thinking of buying a home it’s important to keep an eye on rates and understand how they could impact your decision.
What Does The Survey Show?
A new survey shows that nearly half of Americans say higher mortgage rates would make them less likely to buy a home.
The survey, conducted in early May, found that 49% of respondents said they would be less likely to buy a home if rates went up by 1 percentage point.
Another 24% said they would still buy but would look for a cheaper property. Just 5% said they would be more likely to buy if rates rose.
The remaining 22% said they were unsure or had no opinion.
Not surprisingly, the survey found that younger Americans are more sensitive to rate changes than older Americans.
Sixty percent of people ages 18-29 said they would be less likely to buy a home if rates rose by 1 percentage point, compared to just 43% of people ages 30-64 and 32% of people ages 65 and up.
The survey also found that lower-income Americans are more sensitive to rate changes than higher-income Americans.
Fifty-seven percent of people making less than $30,000 per year said they would be less likely to buy a home if rates rose by 1 percentage point, compared to 49% of people making $30,000-$74,999 and 41% of people making $75,000 or more.
What Does This Mean For The Housing Market?
The findings underscore the importance of mortgage rates in the housing market.
If rates rise too much, it could price some buyers out of the market and lead to fewer sales.
On the other hand, if rates stay low it could spur more buyers to enter the market, which would help to support prices and lead to more sales.
Of course, many factors can impact the housing market, including job security, consumer confidence, and access to credit.
So, even if rates do rise it doesn’t necessarily mean that the housing market will suffer.
Still, it’s something to keep an eye on in the months ahead.