Surveys Confirm Little Impact from Rising Rates | John Burns Real Estate Consulting

Surveys Confirm Little Impact from Rising Rates


 

CNBC did a 95-second clip on rising mortgage rates, including an interesting survey from Redfin about what would happen if mortgage rates rose to 5%. Redfin’s survey of 4000 home buyers concluded that:

  • 6% of buyers would not purchase at all.
  • 20% would purchase a lower-priced home.
  • 20% of buyers would purchase with more urgency, in fear of rates continuing to rise.
  • 25% of buyers would slow their plans to buy a home.

Our survey of 300+ home builders showed similar findings:

  • 29% would likely see little to no impact on sales, especially to affluent buyers who currently own their home.
  • 56% would likely experience a 1%–10% decline in sales volumes, which is not significant enough to cause them to drop prices.
  • 15% would experience a decline in sales of 10% or more, especially to entry-level buyers struggling to qualify.

This thinking falls in line with our 4-5-6 rule, where one of the 4 disruptors (this time the economic disruption of rising mortgage rates) impacts each of the 5 life stages differently, which helps us answer several of the 6 key questions: who will be buying, what will they buy, when will they buy, and where will they buy. Rising mortgage rates do not impact everyone the same.

 


John Burns If you have any questions, please contact John Burns at (949) 870-1210 or by email.

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