M Report – Krista Franks Brock
Despite a reported rise in homebuyer confidence in the third quarter—the first this year—unrealistic mortgage rate expectations could lead the housing recovery astray as the Federal Reserve looks to ease its stimulus program, according to recent reports from Redfin, a national real estate broker and technology provider. Twenty-eight percent of homebuyers said now is a good time to buy a home, up 4 percentage points from last quarter, according to Redfin’s Real-Time Buyer Survey conducted in November.
Another 58 percent of buyers said now is an “ok” time to purchase a home, down just 1 percentage point from last quarter’s 59 percent, according to Redfin. Low inventory remained a top concern with 60 percent of survey respondents citing this concern. Rising prices was also a popular concern, cited among 52 percent of survey respondents. Rising mortgage rates popped up as a concern among 53 percent of survey respondents in last quarter’s survey and then dropped to 41 percent this quarter. However, Redfin finds consumer attitudes toward interest rates quite troublesome. A majority—83 percent—of buyers believe a “normal” interest rate for a fixed-rate, 30-year mortgage loan is less than 5 percent. Furthermore, a significant portion of homebuyers—42 percent—say they “would be unable or unwilling to buy a home if rates rose further.”