The United States Federal Reserves are expected to increase interest this week after nine years, but despite the pending interest hike, majority of homebuyers searching for homes are still planning to buy within 2016.
"If the Fed does decide to raise rates this week, as we expect them to, there is no need for future homebuyers to feel that they've missed the ideal window of time to purchase a home," said Erin Lantz, vice president of mortgages for Zillow Group. "It's important to remember that while a hike would result in higher rates than we have been accustomed, they are still historically low. Mortgage rates are an important factor to consider during the home buying process, but personal considerations about the home type and location should trump concerns about moderate rate changes."
According to their press release in PR Newswire, Zillow revealed that 70 percent of homebuyers searching for homes right now still plan to buy within 2016 even with the impending interest rates hike. 45 percent of the current shoppers however, said that they still plan to buy a home, but would consider looking for a smaller home or a less expensive community.
"The larger concern for future homebuyers is the Fed's commitment to a path of rate hikes in the months ahead," continued Lantz. "If the Fed continues to raise rates on a monthly or even quarterly basis, then it is more likely that we will eventually see the end of the era of incredibly low mortgage rates and corresponding high affordability."
Zillow also reported that the respondents of their survey claimed they were most concerned about finding an affordable home amidst low inventory (29 percent), followed by saving for down payment (19 percent). Rising mortgage rates ranked low among the concerns of potential home buyers, and were cited as a top concern for only 14 percent of Americans. Millennials, or survey respondents aged 25 to 34, also stated that qualifying for a loan with their credit score was more concerning than the mortgage rates hike.
