National Housing Market Outlook

Surveys Confirm Little Impact from Rising Rates

John Burns photo

John Burns

February 22, 2018

CNBC did a 95-second clip on rising mortgage rates, including an interesting survey from Redfin about what would happen if mortgage rates rose to 5%. Redfin’s survey of 4000 home buyers concluded that:

  • 6% of buyers would not purchase at all.

  • 20% would purchase a lower-priced home.

  • 20% of buyers would purchase with more urgency, in fear of rates continuing to rise.

  • 25% of buyers would slow their plans to buy a home.

Our survey of 300+ home builders showed similar findings:

  • 29% would likely see little to no impact on sales, especially to affluent buyers who currently own their home.

  • 56% would likely experience a 1%–10% decline in sales volumes, which is not significant enough to cause them to drop prices.

  • 15% would experience a decline in sales of 10% or more, especially to entry-level buyers struggling to qualify.

This thinking falls in line with our 4-5-6 rule, where one of the 4 disruptors (this time the economic disruption of rising mortgage rates) impacts each of the 5 life stages differently, which helps us answer several of the 6 key questions: who will be buying, what will they buy, when will they buy, and where will they buy. Rising mortgage rates do not impact everyone the same.

Building Market Intelligence™

Every week, we deliver analysis to over 40,000 subscribers with our Building Market Intelligence™ newsletter. Subscribe to our weekly BMI newsletters to stay current on pressing topics in the housing industry.

About The Author

John Burns photo
John Burns
Chief Executive Officer
As CEO, John grows, leads, and supports a team of passionate, articulate, likable, and smart experts. Together, we solve today so our clients can navigate to tomorrow.

Contact Us

If you have any questions about our services or if you would like to speak to one of our experts about we can help your business, please contact Client Relations at clientservices@jbrec.com.

Products and Services Mentioned

green check icon

Research Subscriptions

Our research services enable our clients to gauge housing market conditions and better align their business and strategic investments in the housing industry. We provide a thoughtful and unique holistic approach of both quantitative and qualitative analysis to help clients make informed housing investment decisions.
green check icon

Real Estate Consulting

Our experienced team of consultants helps clients make sound housing investment decisions. We thrive on their success and work with many clients over multiple years and numerous projects.
green check icon

New Home Trends Institute

The New Home Trends Institute pairs design inspiration with exclusive insights into the “why” behind consumers’ housing choices. Gain exclusive insight into housing preferences and pain points through our monthly survey insights reports, webinars, and proprietary surveys of builders, architects, designers, and other industry professionals.

Latest Insights

Higher-for-Longer Rates Spook CRE Investors, per the Burns + CRE Daily Fear and Greed Index
1Q24 Kitchen and Bath Insights: Middle-Market Malaise; Luxury-Market Strength
Charting a 22-year roller coaster of investor activity