Survey Panels Reveal Real Estate Insights
Buying a home, whether it’s your first or fifth, is a stressful process with hundreds of factors influencing your final decision. Factors range from the physical, like how much work the house needs to become a home, to the financial, like mortgage rates.
There’s no question that mortgage rates affect buyer decisions, but by how much and in what ways?
If you are currently on the market for a new home, you probably already know that the average 30-year fixed-rate mortgage rose to 4.16%.
Real estate brokerage Redfin decided to find out exactly how real homebuyers were reacting in the face of changes in the mortgage rate, particularly if the mortgage rate continued to rise (although significant increases are not predicted for 2017).
The results of their study surprised even the pros. While common sense would dictate that rising mortgage prices would drop the number of people interested in buying a home, the numbers showed otherwise.
In fact, one in four prospective homebuyers wouldn’t change their plans at all, and 23% would actually accelerate their purchasing timeline in the hopes of beating future increases.
Read on to find out more – and how Redfin was able to survey over 3,000 people in 11 major US market regions.
How Resilient are Homebuyers? More Than You Think.
Logically speaking, rising mortgage rates should significantly impact prospective buyers, because this number directly impacts how much interest a homebuyer will expect to pay on their mortgage. Considering a mortgage can span anywhere from 10 years to 50, this is a big deal.
But, mortgage rates are just one drop in the bucket of factors that dictate when the time is right to buy a home. Due to these other factors, fluctuations in the mortgage rate don’t have as much of an impact as one might expect.
Redfin reminds us that “often homebuyers are searching for a new home because of a major life event, such as a birth or a marriage or a job relocation.” These events can be unpredictable, and it’s impossible to time them with the constantly fluctuating market.
These other influences may be why over 70% of respondents would either increase their sense of urgency or maintain the same house hunting timeline.
In contrast, just 2% would cancel their search and 25% would take a step back and slow their search in the hopes that rates would fall once more.
Mortgage Rates Do Impact Home Purchasing, Just on a Personal Level
While the effects are minimal compared to expectations among those who would continue their search, knowing that mortgage rates are rising definitely does impact the decisions made by homebuyers in some way.
For almost 24%, that means increasing their sense of urgency in the hopes of beating out future rate increases.
For 22%, rising mortgage rates means looking in more affordable locations or considering a smaller home to compensate for the additional expense.
Read full findings and in-depth analysis: Rising Mortgage Rates: Homebuyers Are More Resilient Than You Might Think.
Redfin, SurveyGizmo, and a Winning Research Methodology
Redfin is a real estate brokerage that is changing the real estate landscape for homebuyers, owners, and sellers by sharing data-driven insights informed by market trends and custom research. Its goal is to empower their clients to be smarter and faster as they react to the constantly changing marketplace.
By taking matters of data into its own hands, Redfin is able to get to the heart of the issues and challenges that matter most to its audience.
In this case, Redfin asked: “If mortgage rates were to rise above the current 4%, what effect would it have on your home-buying plans?”
To find the answer, the brokerage needed to design a survey study that would take into account regional variations in markets across the entire United States. To make sure they hit each of their target audiences, Redfin turned to SurveyGizmo’s Panel Services Team.
SurveyGizmo fielded the study to 3,300 people currently residing within one of the 11 major markets. Qualified respondents had either bought or sold a home in the past year, or planned to buy or sell within the next year.
To ensure that the data was both consistent and representative, SurveyGizmo set quotas of 300 respondents per each target market.
Reaching Research Insights With Panels
For large scale research projects like this one, working with panel companies is often the easiest, fastest, and most accurate way to find the right respondents to get the insights companies need. Fortunately, if managed correctly, it can also be the most cost effective.
SurveyGizmo’s panel program manager works with the top panel companies in the industry to negotiate the best prices for you and helps dial in the demographics you need to target. This reduces the amount of time you need to spend managing the project behind the scenes, and more time working with your hard-earned data.
For Redfin, panels enabled the company to reach an audience that was dispersed widely geographically, but targeted to the narrow focus of homebuyers. The resulting insights speak for themselves.
After all, there’s no place like home.
Read their full report and more real estate insights at Redfin.