Sub Six Percent a Key

The traditional American dream of homeownership continues despite some challenging years in the housing market. Most Americans believe that owning a home is still attainable, but for many would-be homebuyers, it depends on an interest rate reduction to less than 6%, according to a recent Realtor.com survey. While most generations share this opinion, Millennials and Gen Z respondents indicate they would be slightly more flexible, with nearly half (47%) and 37%, respectively, saying they would still buy a home if rates rose over 8%. “The current market is very different from where it was before the pandemic, but many Americans still have a positive outlook towards achieving the dream of buying a home,” said Danielle Hale, Chief Economist at Realtor.com. “This optimistic lens may shape the way younger shoppers in particular view mortgage rates. Although mortgage rates are up from a year ago, they have declined from their peak. While some home shoppers and sellers are likely holding out for even lower rates, the improvement in affordability as rates fall has already ushered in an uptick in listings and contract signings.”

Although many Americans still want to buy a home, they are waiting for mortgage rates to decrease in order to make that happen. If interest rates fall below 6%, four out of ten Americans who plan to purchase a home in the next year would think it is feasible. Most notably, some 18% of aspiring homeowners believe that purchasing is doable if the mortgage rate falls below 7%—a barrier that was exceeded in late 2023; another 22% of consumers believe they can purchase if the rate falls below 6%; 32% would enter the market if rates dropped below 5%; an additional 18% are searching for mortgage rates below 4%; and the remaining 9% of respondents are unsure of what rate would enable them to purchase.

Source: DSNews