Over the past two years potential buyers have faced higher prices and higher mortgage rates. As a result many of them haven’t entered the market despite an increase in new listings. A new Realtor.com survey found that 57% of those considering buying a home in the next 12 months have delayed their purchase. What's holding them back?
Mortgage and interest rates play a role in the decision process. Over two thirds of those considering purchasing a home are waiting for mortgage rates to decrease and consumers closely following changes in mortgage rates would consider purchasing a home when rates are 5.9% or below, which doesn’t come as a shock considering 86% of mortgage holders currently have a rate under 6%.
But of the 57% of consumers who have delayed their home purchase, they also point to factors such as their personal finances and home affordability as additional reasons behind their decision.
And these factors vary based on the type of homeowner. First time home buyers and renters attribute the delay in their purchase to their personal financial situation and a lack of affordable homes, while homeowners and repeat buyers point to high interest and mortgage rates as main reasons.
Additional findings:
- Even among those who are financially prepared to buy a home, 50% have delayed their purchase due to external market factors
- To re-enter the market, a quarter of those who are financially prepared to purchase need lower interest and mortgage rates
- The decrease in interest rates had a positive influence on 2 out of 5 consumers, especially those who are financially prepared to purchase a home, and it influenced them to start the process of searching for a home
- Half of those who were positively influenced by the interest rate decrease have assessed their financial situation/ability to purchase and started a search for a home.
Please let me know if you’re interested in learning more about the survey. I’m happy to connect you to Laura Eddy, VP of Research and Insights, Realtor.com to speak more about the findings.
Methodology: Realtor.com conducted quantitative research to understand what factors are contributing to consumers’ delay in purchasing homes. The survey was fielded online between October 23-28th, 2024 to a sample of 1202 home decision makers in the U.S. between the ages of 18 and 74 who are considering buying a home in the next 12 months.
