First-time homebuying activity appeared to have picked up in November 2018, according to NAR’s November 2018 REALTORS® Confidence Index Survey, a monthly survey of REALTORS® about their monthly transactions. First-time homebuyers made up 33 percent of residential home sales of REALTORS® in November 2018, up from the 31 percent share in October 2018 and 29 percent one year ago.
The slight uptick in first-time homebuying activity may be due to buyers seeking to take advantage of current rates in anticipation of potential higher mortgage rates in 2019. As of December 2018, the federal funds rate was at 2.25 to 2.5 percent, up from 1.0 to 1.25 percent in November 2017. In its December 2018 meeting, the Federal Operations Market Committee indicated that it is looking at two rate hikes in 2019, with the federal funds rate settling at 2.8 to 3.0 percent by 2021. A one-half percentage point increase in interest rates raises the monthly mortgage payment on a median-priced home of $257,700 financed with 10 percent down payment by about $71 per month, or about $856 a year.
Higher interest rates also affect existing homeowners who may be thinking of moving due to non-financial factors but who may decide not to move to keep their current low mortgage rate. Among 2,823 REALTORS® who responded to the question whether they had client who decided not to move/sell to keep the current mortgage rate, 17 percent responded they had such clients, up from 10 percent in November 2017.
 The margin of error in the November 2018 estimate is two percent.