High home mortgage rates are affecting both would-be buyers and would-be sellers, causing each group to delay moving ahead with a purchase or sale, new surveys by Realtor.com reveal.
Among all age groups, millennials are the most anxious to buy in the next six months. The share with this goal rose from 15% in September 2024 to 23% this year. Just 14% of all survey respondents had similar aspirations.
A third of all respondents cited high mortgage rates as the reason they were holding off from buying. That figure included almost half of millennials (47%) and 55% of Gen Z. In contrast, 35% of Gen X and 18% of baby boomers were deterred for this reason.
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Almost a third of respondents said mortgage rates wouldn’t affect their decision to buy. Nevertheless, only 2% would take that step if rates were above 6%. Most (63%) say rates should fall to 5% or lower before they would consider buying – a challenge when 82% of current mortgages carry interest rates of 6% or lower.
Under these circumstances, many would-be buyers have turned to alternative resources to achieve their goal. Personal savings have been used by 57%, investments or retirement accounts by 15% and gifts or loans from family members by 12%. Among those still planning to buy a home in the next six months, about 25% expect to draw on their retirement savings.
Back to high mortgage rates, many sellers feel locked into their current homes due to interest rates remaining high. In fact, 78% of them believe rates will either stay the same or rise in the year ahead.
Some 43% say the expectation that rates will rise makes a sale more likely, and 20% say a rate increase would do the opposite. “Interestingly, 69% of potential sellers who think rates are going to decline say this expectation increases their likelihood to sell,” the survey found.
Realtor.com senior research analyst Hannah Jones said buyers face additional complications because the supply of budget-friendly homes is limited. “However, we expect that this lock-in effect will ease as more homeowners grow tired of waiting for significant rate changes and as life factors such as jobs, kids and retirements drive more to make a home purchase,” she stated.
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