Buyers who can still afford a home feel they must act quickly in the face of rising mortgage rates: 36% of millennial owners said it happened earlier than planned.
NEW YORK – A third of homeowners recently surveyed by LendingTree say that mortgage rates affected their home purchase timelines, with young adults seemingly in the biggest hurry, a new survey from LendingTree found.
Thirty-six percent of millennial buyers say they bought a home earlier than they intended because they wanted to lock in a lower mortgage rate – significantly higher than the 19% of Gen Xers who sped up plans and 13% of baby boomers who did the same.
However, millennials are nearly three times as likely (13%) as Gen Xers (5%) to wait out the competitive housing market.
First-time homebuyers may be more sensitive to rates because they don’t have another house with built-up equity to leverage and face down payments and other homeownership costs for the first time. Many (28%) first-time homebuyers said they’re more likely to time their purchase based on interest rates compared to prior homeowners (18%), according to the survey.
Still, instead of trying to second-guess the timing of the market, house hunters should focus on whether buying a home makes sense based on their current finances, says Jacob Channel, LendingTree’s senior economic analyst. Rushing into homeownership over the fear of missing out – or waiting for a better deal that may never come – increases uncertainty.
When buyers do move forward, they should also look for the best mortgage rate. However, the survey also found that 56% of homebuyers took the first mortgage rate they were offered instead of gathering multiple quotes, a decision that could cost them thousands over the life of the loan.
Source: “56% of Mortgage Borrowers Didn’t Compare Rates, But Nearly Half of Those Who Did Saved Money,” LendingTree (May 17, 2022)