Do homebuyers care about rising rates?
The short answer is: sort of. Potential homebuyers certainly care if the monthly payment goes up for the same house they were considering a month earlier. That concern, however, comes in third place after the ability to get a mortgage and the ability to find a home they like, according to a survey conducted this week by Harris Poll on behalf of Trulia.
Forty-two percent said they expect mortgage rates to increase over the next six months, while 20 percent think rates will stay the same. Of their biggest worry, 26 percent named ability to qualify for a home loan compared with 24 percent who pointed to rising rates. Millennials, ages 18-34, are even more concerned about their access to credit than about their rate. Thirty-six percent of millennials polled said access was their primary concern versus 26 percent indicating rising rates.
If the Fed raises rates a quarter point, that does not directly correlate to a quarter-point increase in mortgage rates. The average rate on the 30-year fixed loosely follows the direction of the yield on the 10-year Treasury bond. If rates did move a quarter-point higher, they would still be lower than they were in 2013, when the Federal Reserve first announced it would start to “taper” its investment in mortgage-backed bonds.