A third of homeowners recently surveyed by LendingTree say that mortgage rates are affecting their home purchase time lines, and young adults seem to be in the biggest hurry, a new survey from LendingTree shows.
Thirty-six percent of millennial buyers say they bought a home earlier than they intended because they wanted to lock in a lower mortgage rate. That is significantly higher than the 19% of Gen Xers who sped up their plans and the 13% of baby boomers who did the same.
Millennials are nearly three times as likely—at 13%—as Gen Xers, at 5%, to wait out the competitive housing market, LendingTree notes.
First-time home buyers may be more sensitive to rates because they don’t have another house with equity built up to leverage and are facing down payments and other costs of homeownership for the first time. Twenty-eight percent of first-time homeowners said they were more likely to time their purchase based on interest rates compared to prior homeowners (18%), according to the survey.
Still, instead of trying to second-guess the timing of the market, house hunters should focus on whether buying a home makes sense based on their current finances, says Jacob Channel, LendingTree’s senior economic analyst. Rushing into homeownership over the fear of missing out or waiting for a better deal that may never come increases uncertainty.
When buyers do move forward, they should also look for the best mortgage rate. The survey also found that 56% of home buyers took the first mortgage rate they were offered instead of gathering multiple quotes, a decision that could cost them thousands over the life of the loan. Read more: Most Borrowers Don’t Compare Mortgage Rates