Sidelined Homebuyers Say Mortgage Rates Need To Hit This ‘Magic Number’ Before They’ll Buy

More than half of potential homebuyers are holding off on making an offer in hopes that mortgage rates will drop to 5%, according to a surprising new survey.The survey from Neighbors Bank, a mortgage lender focused on first-time homebuyers, found that 72% of potential homebuyers have either delayed or entirely paused their home search until rates improve. A number of other factors are causing potential buyers to hesitate, including economic uncertainty, hope that home prices will drop, and the 18% who reported that they are still saving for a down payment. However, an impressive 34% of survey respondents said that they would buy immediately if mortgage rates dropped to their target tomorrow, with the average buyer naming 5% as their target rate to buy.Despite the importance many potential homebuyers place on mortgage rates, a surprising number guessed the rate incorrectly at the time of the survey. When Neighbors Bank performed the survey in July, the national weekly average for a 30-year fixed-rate mortgage was 6.49%, according to the Freddie Mac Primary Mortgage Market Survey (PMMS). Only 35% of survey respondents selected the correct range, while 45% thought the rate was over 6....