Most Americans Are Still Feel Locked In by
Their Current Mortgage Rate, Looking for Rates
Below 4%
AUSTIN,
Texas, May 29, 2025 /PRNewswire/ -- Millennials
are the only generation with a greater interest in buying a home in
the next six months compared to September
2024 according to a new survey from
Realtor.com®. Millennials' buying intention grew to 23%
this year compared to last September (15%), although most Americans
(69%) are not planning to engage in a real estate transaction in
the next six months.
"Despite current market challenges and persistently high
mortgage rates, Millennials are showing a notable increase in home
buying interest this spring compared to last fall," said
Laura Eddy, vice president of
research and insights at Realtor.com. "Even though we found a
change in Millennial homebuying intent, the influence of mortgage
rates cannot be overstated, with the vast majority of Americans,
including Millennials, prioritizing lower rates before committing
to a purchase. The lock-in effect is still very much in effect
"
High mortgage rates continue to impact the market, with
one-third of respondents reporting they have delayed purchasing a
home due to these rates, a figure consistent with September 2024 findings. Younger generations are
particularly affected, with over half of Millennials and Gen Z
stating they've postponed their purchase. Gen Z appears to be the
most cautious and wary of high mortgage rates, showing an increased
inclination towards signing a lease and a growing number delaying
home purchases due to mortgage rates compared to September.
Overall, over two-thirds of respondents acknowledge that
mortgage rates influence their decision to buy a home. In contrast,
Baby Boomers are less influenced by mortgage rates overall, 41% of
Baby Boomers say that mortgage rates do not impact their decision
to buy a home. Notably, only 2% would consider purchasing a home
with mortgage rates exceeding 6%. Most, 63%, are looking for rates
below 5.0% before they would consider purchasing a home.
The survey also explored how homeowners finance their home
purchase. A majority (57%) across all generations have utilized
personal savings, while 15% have accessed personal investments or
retirement accounts. Additionally, 12% leveraged gifts or loans
from family members. Among those planning to buy a home, one in
four intend to use retirement accounts or personal investments for
financing.
"Across much of our research we see a trend where potential
homebuyers feel stuck when it comes to buying a home due to their
current mortgage rate," said Hannah
Jones, senior research analyst, Realtor.com®.
"Mortgage rates on top of an insufficient supply of budget-friendly
homes complicates the affordability picture for many homeowners,
especially first time homebuyers who do not have equity from their
existing home to help offset mortgage rates. However, we expect
that this lock in effect will ease as more homeowners grow tired of
waiting for significant rate changes and as life factors such as
jobs, kids and retirements drive more to make a home purchase."
A recent Realtor.com® survey looking at
potential home seller trends found similar attitudes around
mortgage rates where half of the potential sellers who have a
mortgage feel 'locked in' due to high mortgage rates, and that
effect grows for those who have been thinking about selling for
more than a year.
According to the sellers survey, more than three out of four
(78%) potential sellers think interest rates will either stay the
same or increase in the next 12 months. For potential sellers who
think rates are going to increase, 43% say this expectation
increases their likelihood to sell, and 20% say a rate increase
would decrease their likelihood to sell. Interestingly, 69% of
potential sellers who think rates are going to decline say this
expectation increases their likelihood to sell. This suggests that
potential sellers are motivated by interest rate changes and
interest rates impact potential sellers likeliness to list.
Methodology
Online survey conducted on April 10-11, 2025 among a national sample of 2203
Adults ages 18+
About Realtor.com®
Realtor.com®
pioneered online real estate and has been at the forefront for over
25 years, connecting buyers, sellers, and renters with trusted
insights, professional guidance and powerful tools to help them
find their perfect home. Recognized as the No. 1 site trusted by
real estate professionals, Realtor.com® is a valued
partner, delivering consumer connections and a robust suite of
marketing tools to support business growth. Realtor.com®
is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV]
subsidiary Move, Inc.
Media Contact: Mallory
Micetich, press@realtor.com
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SOURCE Realtor.com
