Us homebuyers feel impact of higher mortgage rates

Respondents toured homes with Redfin agents in the last three months, and data was collected from August 23 through 26.

This survey included new questions regarding mortgage interest rates to evaluate the effect rising rates are having on homebuyers. While low inventory continues to be a main source of homebuyers' frustration, rising mortgage rates are a nearly as common of a concern. Survey respondents blamed surging rates for harming their ability to buy a home and for changing the pace of their home search. In contrast with previous quarters' surveys, this report shows marked decreases in buyers' expectations that home prices will continue to rise. Additionally, fewer buyers believe now is a good time to buy a home. At the same time, fewer believe now is a good time to sell.

Results Snapshot:

•             63% of respondents indicated that rising mortgage interest rates are making it harder for them to afford a home;

•             A majority of respondents said rising mortgage rates caused them to alter the pace of their home search, with 33% speeding up their search, 20% slowing it down, and 1% halting their search efforts;

•             63% of buyers believe that now is a good time to sell a home in their neighborhood, down from 66% last quarter, the first drop in three quarters;

•             24% said that now is a good time to buy a home in their neighborhood, down from 32% last quarter, and from the rate's peak 48% in the fourth quarter of 2012;

•             58% of buyers cited low inventory as a major concern with buying a home now, down from 66% last quarter and five points more than the 53% of respondents who indicated that rising mortgage rates were a top concern.

"Our survey results underscore buyer sensitivity to this summer's mortgage rate fluctuations," said Redfin economist Ellen Haberle. "Should interest rates spike again in the coming months in response to a tapering by the Federal Reserve of asset purchases, we could see a significant drawback or even a temporary freeze in buyer activity."