While many buyers in today’s market are not being deterred by rising interest rates, a recent survey by a credit bureau shows that 42% of millennials say that the raising interest rates has caused them to put their home buying plans on hold.
The key interest rates were increased by 1/4 percentage point in December and again in March. This leaves indirectly to an increase in mortgage rates. Even though interest rates are still at historic lows, first time home buyers – mostly Millennials – had put thought into putting their search for a home on hold.
The higher rates make it more difficult to qualify for a mortgage. Also, finding affordable inventory is a bit of a challenge due to increased competition of buyers looking for the few available homes.
But not all are putting their plans on hold. Many first-time buyers have enough leeway that they can absorb a slightly higher mortgage payment if it means getting into a home. For many, the challenge is not making the mortgage payments. That is less of a concern than focusing on how to pay for home improvements and maintenance on the home.