Mortgage rates rising? Most potential homebuyers still plan to purchase

The threat of rising mortgages isn’t deterring most potential homebuyers.

According to a recent survey from Redfin, only 6 percent of homebuyers said they would no longer purchase a home if mortgage rates rose above 5 percent. One-quarter of buyers said possible increasing mortgage rates will have no impact on their search, and 21 percent said they would look to buy sooner to avoid even higher rates.

Buying sooner may be on the minds of even more homebuyers, as 77 percent predict home prices will increase in their communities over the next year. Only 6 percent believe home prices will decrease, and 17 percent anticipate no change.

“Tight credit, lack of inventory and high demand are the major factors that tell us there’s no housing bubble, despite rapid price increases,” said Nela Richardson, Redfin’s chief economist. “There are still many more buyers than the current housing supply can support, with no major relief in sight. Strict lending regulations make it much harder to buy a house you can’t afford than during the housing boom a decade ago. Finally, still-low interest rates somewhat offset high prices for some buyers.”

However, many homebuyers do have concerns about the U.S. economy. Thirty-eight percent said that high taxes are the top concern, followed by affordable housing for 33 percent. Still, 28 percent cited the income gap between the rich and the poor, and 22 percent said rising interest rates. Fifteen percent of respondents who sold a home last year did not purchase a new one due to concern over immigration policies.

When relocating to a new community, some homebuyers found themselves in the political minority. Eighteen percent of millennials, 13 percent of Generation X and 4 percent of baby boomers found themselves as supporters of the other side of the political spectrum when they bought their new home.