- Among U.S. homeowners who plan to sell their home in the next three years, 67% say they would be willing to delay selling to wait out high mortgage rates.
- Meanwhile, 26% of all U.S. homeowners say high mortgage rates would not impact their decision on when to sell their home.
- Of those 26% of homeowners, 43% say it’s because they would not need a mortgage to buy a new home.
Homeowners and prospective homebuyers are left on the sidelines as mortgage rates near the highest point in more than two decades. To combat rising rates, many existing homeowners are willing to consider staying put – perhaps especially those who were able to secure record low mortgage rates during the pandemic. Right now, nearly three quarters of mortgage borrowers (72%) have rates below 4% (source), which is significantly lower than where mortgage rates stand today.
According to a new study conducted by The Harris Poll on behalf of Intuit Credit Karma among more than 1,400 U.S. homeowners two thirds (67%) of U.S. homeowners who plan to sell in the next three years say they would be willing to delay their plans until after mortgage rates go down, with 26% say they would be very willing to delay their plans. This trend was exaggerated among millennial (ages 27-42) homeowners who plan to sell their homes in the next three years – 79% say they’d delay their plans until rates go down with 32% saying they’d be very willing to wait out high interest rates.
Would you rather…?
Homeowners are willing to go to great lengths to avoid selling in this market, especially if it would mean taking on a mortgage at today’s rates. Aside from delaying their plans to sell, some homeowners are willing to stay in homes they’ve outgrown or even rent out their current home and move into more affordable housing temporarily. Here’s a look at the lengths homeowners would go to delay their plans to sell:
|What would you be willing to do to delay selling to avoid having a high mortgage interest rate on your new home?||Homeowners (if they were to consider selling)||Homeowners who plan to sell in the next three years|
|Continue living in a smaller space than needed||22%||24%|
|Rent their current home and move to a more affordable rental temporarily||17%||25%|
|Not relocate to take a higher paying job||10%||11%|
|Continue living with a spouse/partner after splitting up||7%||11%|
|Put off having children (because current home is too small)||6%||14%|
|Keep their child(ren) in an undesirable school district||4%||8%|
Millennials planning to sell their homes in the next three years are particularly avoidant in today’s high-interest environment. Among those who plan to sell in the next three years, nearly a third (32%) say they would continue living in a smaller space than needed to avoid having a high mortgage rate on their new home. Another 3 in 10 (29%) would be willing to rent their current home and move to a more affordable rental temporarily. Other actions they’d be willing to take include putting off having children because their current home is too small (24%), not relocating to take a higher paying job (20%), continuing to live with a spouse/partner after splitting up (17%), and keeping their child(ren) in an undesirable school district (14%).
Mortgage rates are less relevant to older homeowners
High mortgage rates aren’t spooking everyone. About 1 in 4 U.S. homeowners (26%) say high mortgage rates would not impact their decision on when to sell their home, with Boomer (ages 59-72) homeowners being the most likely to say they would not impact their decision on when to sell (35% v. 23% Gen X ages 43-58, 20% Gen Z ages 18-26, 14% Millennials).
Among homeowners who say high mortgage rates would not impact their decision about when to sell their home, 43% say it’s because they would not need a mortgage to buy a new home and 28% say it’s because they have enough money to cover the high rates.
“While it’s not surprising that homeowners are apprehensive about selling their home in fear of losing their low mortgage rate, there are other factors to contemplate beyond mortgage rates when deciding when is the right time to sell,” said Aniva Hinduja, general manager of home and mortgage at Credit Karma. “For homeowners who are unhappy with their current housing situation, it may not be worth holding out for rates to fall. If they can afford to make that next home purchase while rates are where they’re at, there will likely be a chance to refinance to a lower rate down the road. Plus, most homeowners have been able to build equity in their homes over the years, which means they might have the opportunity to put more money down toward a new home to ease some of the financial burden that may come with having a higher mortgage rate. ”
This survey was conducted online within the United States by The Harris Poll on behalf of Intuit Credit Karma between May 24-26, 2023 among 1,484 U.S. homeowners ages 18+, among whom 282 plan to sell their home in the next three years The sampling precision of Harris online polls is measured by using a Bayesian credible interval. The sample data is accurate to within +/- 2.9 percentage points using a 95% confidence level. This credible interval will be wider among subsets of the surveyed population of interest. For complete survey methodology, including weighting variables and subgroup sample sizes, please contact email@example.com.