With more interest rate hikes expected this year, will millennials opt out of buying a home?
In a recent survey conducted by TransUnion, 42 percent of millennials who responded stated that they would put off buying a home as a result of the 2016 rise in interest rates.
The key interest rate, which indirectly impacts mortgage rates, increased ¼ percentage point in December and again in March, sparking homebuyer apprehensions about making that home purchase.
While higher rates do make qualifying for a mortgage more challenging, it seems that homebuyers’ apprehensions did subside a bit in February, because the majority of those surveyed reported planning to move ahead with their purchase, even in light of potentially higher payments resulting from higher mortgage interest rates.
With the Spring market upon us, demand has further increased, and as a result, first-time homebuyers are facing stiff competition due to the short supply of affordable homes in many markets throughout the U.S.
The Federal Reserve has indicated that we could see two or three more rate hikes in 2017, so we’ll have just have to wait and see whether those increases will have any affect on our currently strong demand.