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Homebuyers singing the blues

By Judy Martel · Bankrate.com
Friday, September 13, 2013
Posted: 6 pm ET

Buyers are feeling the pinch of rising mortgage rates and low inventory in their search for homes, according to a survey of active homebuyers. A quarter of them say they are experiencing buyer fatigue and are becoming discouraged.

Rates barely moved in the latest Bankrate.com national survey of large lenders -- from 4.72 percent a week ago to 4.71 percent this week for a 30-year fixed-rate mortgage. A year ago, the rate was 3.81 percent.

It's not just the rates; it's the inventory

But it's not just rising rates that concern buyers: Fewer homes for sale mean that prices could continue to rise as well. In the quarterly homebuyer survey by Redfin, more than half of respondents, 53 percent, said rising rates are their second-largest concern, after low inventory of homes for sale. Nearly two-thirds said rising interest rates during the third quarter harmed their ability to find a home. Active homebuyers were polled in 22 metro markets across the country.

The latest data available from National Association of Realtors show that there were 2.19 million existing homes available for sale at the end of the second quarter -- a 7.6 percent drop in inventory from a year earlier.

Why are people looking for homes?

In a press statement last month, Lawrence Yun, chief economist at the National Association of Realtors, said that, "Tight supply conditions look to be with us for the balance of the year in most of the country. Areas with tighter supplies generally are seeing the strongest price growth, including markets such as Sacramento, Atlanta, Las Vegas, Naples (Fla.), San Francisco and Los Angeles."

When asked in the Redfin survey why they were planning to buy a home this year, 37 percent of respondents in the third quarter said low interest rates were the reason, as opposed to 56 percent in the second quarter. For the first time, the survey also asked if rising home prices factored into the decision: 33 percent said it did. Thirty-eight percent attributed their decision to search for a home to a "life event."

Keep up with your wealth and mortgages, and follow me on Twitter @JudyMartel.

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9 Comments
Tommc
September 16, 2013 at 10:21 pm

Due to artificially low bank appraisals protecting the bank, buyers can't get a mortgage to match the sellers price even when the price is more reflective of true value. I invested $20k in materials doing the labor myself and remodeled a two bath two bedroom condo by putting in new kitchen cabinets, granite counters, new stainless steel appliances, porcelain tile floor refinished hardwood floors, gutted two bathrooms and put in all new bath fixtures and new tile everywhere all in good contemporary taste. My appraised value came in identical to three other similar condos that sold recently all original to 1986 in bad shape without hardwood floors and no updates whatsoever. I refuse to sell in a market that doesn't recognize value. Maybe that's why inventory of good homes for sale is low.

Bill
September 16, 2013 at 8:20 pm

Bankrate.com must be in another world or on another planet. I line in NJ and I am looking for a second/vacation home and while my preference is Florida I can find hundreds if not thousands of home for sale. If I look at a real estate web site and see a home for sale 6 out of ten are in foreclosure, vacant, ready to move into and available at bargain basement prices... Wake up America, just because someone says it on the internet and someone wrote an article about does not make it true !!!! There are so many house for sale I am having trouble picking one!!!

Jeannie Kotynski
September 16, 2013 at 8:17 pm

And I will take the advice of anyone named Jerry Valade but only if he's married to Cindy!

Cal Handy
September 16, 2013 at 6:18 pm

Here we go again! A new housing bubble is developing at the speed of light, if not faster. Not long ago there were too many houses available and now (suddenly) there are too few. Wake up my fellow Americans and stop being continuously manipulated by the home sales industry. There are still many, many people with homes that are under water and more fighting foreclosure efforts against them. Paying more for homes anywhere isn't worth it. Fool me once ...

Robert Checketts
September 16, 2013 at 5:51 pm

Agents selling property are ridicules with a rate of 6% it should be more like 2%.maybe they would get more people to list.

jerry Valade
September 16, 2013 at 5:13 pm

People who want to purchase a home should do it sooner than later. I remember interest rates above 12% in the early 1980's. the rates today only seem high but in fact are historically low. run-away Inflation is on the way, home prices will continue to increase and so will interest rates. I predict that within five- years homes will once again represent the majority of family wealth. My advice---buy Now!

Jim Burris
September 16, 2013 at 2:09 pm

PMI that you carry for life of LOAN..Why not just rent..People are tired of being taken advantage of by the FAT CATS..Cost of housing is rediculous

alex johnson
September 14, 2013 at 7:53 pm

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PERU,ONLY A COUNTRY,GROWING,PRODUCING
COCAINE,HEROIN,ETC...
IT'S MARKET,USA!

alex johnson
September 14, 2013 at 7:44 pm

5 blocks away,Ruffis Simms,aka.,Wease CEO,4 CORNER HUSTLERS,
GANGSTERS
1990-3013
FEDERAL POLICE,LAWS
FOR ANY ARRESTS,C0NVICTIONS
CHICAGO,AUSTIN,WEST-SIDE
15TH POLICE DISTRICT

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