Average mortgage rates rose above 4.5% this month, and could rise to or above 5% by the end of the year if similar patterns persist, and according to industry projections. While rates remain near historic lows, rising rates may price some home buyers out of their ideal homes, or out of the market altogether.
In a Redfin survey of 4,000 consumers who had bought or sold a home in the last year, attempted to do so, or planned to soon, about 21% said that rising mortgage rates might lead them to purchase a smaller home or look in different neighborhoods, up from 18% one year ago. About 19% would aim to purchase before rates rose any further, while 32% would slow down their search to see if mortgage rates cooled.
A small share of respondents, just 5%, said that they would exit the housing market altogether if mortgage rates rose above 5%. About 24% said that their home search would not be impacted if mortgage rates rose to this level.Read More