Key Details:
- New research from Realtor.com reveals that 57% of potential home buyers have delayed purchasing due to high mortgage rates, personal finances, and affordability concerns.
- First-time home buyers were likely to say they delayed their purchase due to their own financial situation, while repeat buyers were more likely to say high mortgage rates held them back.
- Renters were more likely than homeowners to say they delayed their purchase due to their personal finances or to the lack of affordable homes.
The housing market is at a standstill for many potential buyers, as new findings from Realtor.com show over half of those considering a home purchase (57%) have put their plans on hold.
The culprit should surprise no one; high mortgage rates and a lack of affordable options have stymied potential buyers, with renters more likely than repeat home buyers to say they’ve held off due to either personal financial constraints or the lack of affordable housing.
Over the past couple years, higher home prices and elevated mortgage rates have priced out many would-be home buyers—in part due to those high rates inhibiting potential sellers with much lower rates locked in.
Now, even as inventory has recovered in more than half of all major U.S. metros, buyers are still holding off as rates hold steady around 7%.
Realtor.com’s research shows consumers keeping tabs on market conditions are open to making a home purchase when mortgage rates fall to 5.9% or lower. That’s hardly surprising since 86% of today’s mortgage holders are locked into rates under 6%.
Of course, mortgage rates aren’t the only deterrent. For the 57% who’ve delayed their home purchase, other factors come into play, including:
- Personal financial situation (lack of savings, high debt-to-income ratio, etc.)
- Lack (or shortage) of affordable housing—in their market or in general
Top deterrents for different types of home buyers
The primary deterrent also varied by the type of homebuyer.
When comparing homeowners versus renters, renters were most likely (44%) to cite their personal financial situation as their primary obstacle to homeownership—followed by the lack of affordable homes to buy (43%).
Homeowners, on the other hand, were most likely to hold off on a new home purchase because “interest rates are still too high” (43%), with “mortgage rates are still too high” being the next most-common deterrent at 42%.
At 47%, first-time homebuyers were most likely to cite their own financial situation as the main reason they put homebuying on hold, followed by lack of affordable homes at 42%. Interest rates and mortgage rates trailed behind at 37% and 35% respectively.
Compare that to repeat buyers, who at 43% were most likely to say they put off their homebuying plans because “interest rates are still too high.” Forty-one percent blamed excessively high mortgage rates, while 38% cited the lack of affordable homes and 35% said their personal finances were the primary roadblock.
Among those financially ready to buy a home…
Even among those financially prepared to buy a home, half (50%) have cited external market factors as reasons for putting their homebuying plans on hold.
One-quarter of potential buyers who are financially ready to buy a home need lower interest rates to re-enter the market.
September’s drop in mortgage rates had a positive impact on two out of five consumers—particularly those who were financially ready to make a home purchase—and motivated them to start the home search.
Half of those positively impacted by that temporary reprieve assessed their financial readiness to buy a home and began their search.
Data for these findings comes from an online survey conducted between October 23-28, 2024. Realtor.com fielded this survey to a sample of 1,202 U.S. household decision-makers aged 18 to 74 who were considering buying a home in the next 12 months.
More than a drop in mortgage rates, what today’s potential buyers need is guidance from knowledgeable real estate professionals who are committed to helping them overcome obstacles to homeownership.
What are you doing to meet that need?
