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Rising interest rates main concern for Americans

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Rising Interest Rates Main Concern For Americans

More than half of current home shoppers in the USA consider Rising interest rates to be among the top factors impacting their ability to purchase a home.

Mortgage rates increased following the US presidential election and federal funds rate hike in December. With several more federal funds rate increases expected this year, rising rates may have an impact on home buying activity and affordability for the first time in years.

Indeed, according to a new survey from Zillow Group Mortgages, respondents who are currently in the process of searching for or buying a home claim they are most concerned about finding an affordable home amidst low inventory (65 per cent), followed by concerns over rising interest rates (53 per cent). When this same survey was conduct in 2015, rising mortgage rates (50 per cent) ranked lower among top concerns for home buyers, falling behind both finding an affordable home (73 per cent) and saving for a down payment (59 per cent).

Despite increased concerns over rising rates, though, most Americans will move forward with a home purchase, even if rising rates increase their monthly payment by $100. Nearly half (49 per cent) of home shoppers would move forward with a home purchase even if rising rates were to increase their monthly payments by at least $200.

That said, as rates rise and monthly payments for homes will increase, buyers’ budgets will be more strained. A quarter of home shoppers claim they would reconsider the type of home they are searching for, such as looking for a smaller home or less expensive community, should their monthly payment increase by up to $100 (25 per cent). If monthly payments were to increase up to $200, another 38 per cent of home shoppers would change the budget of the home they are searching for.

“For years, falling interest rates have been a boon to the US housing market, keeping monthly mortgage payments low for first-time and move-up buyers alike, even as home values rose,” says Erin Lantz, vice president of mortgages for Zillow Group. “As rates rise this year, first-time buyers and those looking to buy in expensive markets where affordability is already an issue will feel the pinch of higher rates on their budget. That said, for most borrowers, there is quite a bit of head room for rates to rise before home-buying becomes unaffordable.”

The post Rising interest rates main concern for Americans appeared first on TheMoveChannel.com.



This post first appeared on TheMoveChannel.com | International Property News, please read the originial post: here

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