Homebuyers in the United States are increasingly willing to purchase properties even if interest rates remain high, according to a study by Bank of America published on Monday.
About 62% of respondents said they would wait for borrowing costs to drop before buying a home, according to 1,000 people surveyed in September. This figure is lower than the 85% six months earlier.
“We’re starting to see that lack of patience in the survey, which should ultimately lead to activity going forward.”he told Reuters Matt Vernonhead of retail lending at Bank of America.
In an attempt to control inflation, the Federal Reserve has raised its official rate a total of 5.25 percentage points in the last 20 months. The US economy is showing signs of cooling, raising expectations that rate hikes have come to an end.
Nearly 80% of American mortgages have a rate below 5%. This contrasts with average fixed rates on 30-year fixed mortgages, which rose to 8% in October, the highest in more than two decades, deterring buyers.
Homeowners were willing to sell their existing homes and take on higher-rate mortgages if they found a property in a more affordable area or if their dream home became available, the survey found. They also sold their homes for professional or family reasons or to seek a lower cost of living.
Last month, new home sales fell 5.6%, to a seasonally adjusted annual rate of 679,000 units, as mortgage rates scared away buyers.
Still, pent-up demand for homes by Americans is expected to boost sales. “We will be prepared and able to use our internal resources to meet demand when it occurs”Vernon noted.
Source: Gestion
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