Home >> Daily Dose >> Survey: Americans Unconcerned About Mortgage Rates
Print This Post Print This Post

Survey: Americans Unconcerned About Mortgage Rates

mixed-numbersAs housing market analysts keep a close eye on interest rates and consumer attitudes, a new survey finds many Americans aren't especially concerned about mortgage rates.

In findings released Monday, Bankrate.com revealed that out of 1,000 adults polled last month, more than three in five would prefer to own a home instead of renting, even if mortgage rates jump by more than a full percentage point above their current level. As of last week, Bankrate's measure for the average 30-year fixed mortgage rate was 3.80 percent.

Furthermore, about one in three say they would still consider buying a home if the 30-year fixed average shot up past 10 percent.

"This refinances or confirms that despite the trauma and the drama that we have seen in the real estate market in 2007, people still want to own a home, even if you are looking at potentially higher rates," said Daniel Roccato, assistant professor of economics at Rutgers University.

However, he added that there's a difference between Americans' willingness to pay a higher rate and their ability to actually afford it. Assuming a 20 percent down payment, Bankrate estimates the monthly cost of a $240,000 loan at a rate of 4 percent would be about the same as the monthly payment on a $130,000 loan at 10 percent—cutting down drastically on the amount of home many consumers could pay for.

Just like many Americans don't anticipate a rise in rates would stop them from buying a home, today's low levels don't seem to be inspiring many to take advantage. A combined 16 percent of respondents in Bankrate's survey said they plan to get a new purchase mortgages or to refinance their current mortgage this year, while the huge remainder are either uninterested or undecided.

One alarming finding in Bankrate's poll was the number of current homeowners who are unsure of what their own mortgage rate is: 35 percent. That could be one reason why so many seem to have ignored the possibility of refinancing under today's low rates, says Ed Conarchy, mortgage adviser for Cherry Creek Mortgage Co. in Gurnee, Illinois.

"As consumers, once we get the mortgage, we sweep the rate under the rug and we don't worry about it," Conarchy said. "So, we don't look at rebalancing or refinancing opportunities."

About Author: Tory Barringer

Tory Barringer began his journalism career in early 2011, working as a writer for the University of Texas at Arlington's student newspaper before joining the DS News team in 2012. In addition to contributing to DSNews.com, he is also the online editor for DS News' sister publication, MReport, which focuses on mortgage banking news.
x

Check Also

Survey: Homeownership Remains Elusive for Baby Boomer Renters

A recent look into housing affordability by NeighborWorks America has found that three in five long-term baby boomer renters feel homeownership remains unattainable.