Homebuyers are adjusting to the highest interest rates since at least 2010 by either considering cheaper homes or making sacrifices to afford elevated mortgage rates, a new Bloomberg Intelligence (BI) survey has revealed.
Findings from the research show the rapid increase in mortgage rates has spooked prospective homebuyers, with 36% of respondents opting to postpone or pause plans to buy a home.
Still, this compares with 44% after the 2022 mini-Budget, implying more resilience vs. October, especially as this group is also looking to buy relatively sooner.
Though 50% (56% in October) of that group intend to purchase a house in one to two years (BI’s survey only includes those looking to complete within the next two years), a further 28% (27%) want to go execute on a deal in seven to 12 months, with 17% (12%) preferring four to six months.
Only 32% of buyers with unchanged schedules aim to complete in the next six months (only 25% in London).
In contrast, 35% of buyers have accelerated their plans, of whom 44% plan to buy in the next six months.
Iwona Hovenko, real estate analyst at Bloomberg Intelligence, said: “Our findings may indicate determined buyers may be slowly getting used to higher rates.
“Though rising mortgage rates might prevent or delay house purchases for about 27% of the survey participants, this is an improvement vs. 30% in October.
“Another 16% claimed rates won’t derail their plans – also better than the 11% previously.”
Hovenko added: “Respondents also continue to show significant flexibility, which may support sales.
“As many as 20% of homebuyers would consider a cheaper property, similar to Bloomberg Intelligence’s previous survey in October.
“Other top choices — such as extending mortgage terms (15%) and making other savings (15%) — suggest buyers are keen to make their next move on the housing ladder quickly.”
Home buyers who are pausing or delaying their homebuying plans cited elevated mortgage rates (30%) or the high cost-of-living (22%) as the most-pertinent issues.
Some buyers delayed their buying plans (16%) while waiting for house prices to decline, with a smaller group (14%) also worried about the economic outlook.
This sentiment was also mirrored by Londoners, who were slightly keener to wait for house prices to fall.
