AUSTIN, Texas, April 04, 2024 (GLOBE NEWSWIRE) -- A new national consumer study of more than 1,000 participants by QuestionPro finds that the vast majority of home buyers and sellers are actively tracking mortgage rates and waiting for them to fall below at least 6 percent, and preferably below 5 percent, before buying or selling a house. Mortgage rates are not projected to fall fast enough or soon enough to meet this threshold, likely putting a real estate rebound on hold until 2025.
For buyers, the study found the sweet spot for mortgage rates is between 3 and 5 percent, with nearly 60 (56.6) percent of respondents saying they’d purchase at that level. Another 15 percent (14.18) said that they’ll buy when rates drop to between 5 and 6 percent. Less than 7 percent (6.8) say that rates between 6.1 and 6.5 percent will motivate them to enter the market.
For sellers, the sweet spot is similar – 56 percent say they’d put their house on the market when rates are between 3 and 5 percent. Nearly 20 percent (16.09) say that rates between 5 and 6 percent would motivate them to list.
While mortgage rates are unpredictable and tied to external factors, most experts are predicting rates to only fall between 5.9 and 6.1 percent. Bankrate reports that: “The Mortgage Bankers Association projects rates to fall to 6.1 percent by year’s end, while Fannie Mae forecasts they’ll be at 5.8 percent. The National Association of Realtors estimates rates will average 5.9 percent for the full year.”
The challenge is clear – with 51 percent of sellers waiting for rates to drop below 5 percent and only 16 percent listing when rates are between 5 and 6 percent, inventory will continue to be constrained. Even if somehow sellers listed without a drop in rates, there appears to be little appetite among buyers to jump in until rates are significantly lower.
“Our research suggests that this is a ‘little too little and a little too late’ scenario,” said Dan Fleetwood, President of QuestionPro Research & Insights. “The vast majority of buyers and sellers need rates between 3 and 5.5 percent in order to make a move. Even if the rates are below 6 percent at the end of the year, it’s the wrong time to be putting houses on the market. The rally will have to wait until next spring.”
There are some bright spots elsewhere in the survey. For instance, nearly 70 percent (69.8) are confident or very confident that they will be able to find a home they like at a price they can afford. This is remarkable given the small supply of homes on the market today. Additionally, about 4 in 10 of both new/first time buyers and sellers say the $10,000 tax credit proposed by President Biden in his State of the Union speech will impact their decision.
The survey also tracked other aspects of the real estate market. A full survey report is available free here: https://surveys.questionpro.com/a/t/7Bq9r2Z11Fb
About QuestionPro
Founded in 2006, QuestionPro is a global provider of online survey and research services that help companies make better decisions through data. Our fully integrated online platform includes surveys, research & insights, customer experience (CX) and workforce/employee experience software. We additionally offer polling, journey mapping, employee 360s, and data visualization. Our clientele ranges from small businesses to Fortune 100 companies, who rely on us for insights about customers, employees, and the marketplace. With offices in the US, Mexico, Europe, Canada, Japan, the United Arab Emirates, and India, our customers have 24/7 access to highly trained support specialists and engineers. More information is available at www.questionpro.com.
