Mortgage rates may continue to hover around historic lows, but 83 percent of homeowners in a recent survey don't see anything unusual in a 30-year fixed rate below 5 percent, and 27 percent of them said a normal range is between 3 percent and 4 percent.
In fact, the 30-year fixed has averaged 6.73 percent since 1990 in Bankrate.com's weekly index. It wasn't until May 2010 that it dropped below 5 percent. (In May 1990, it hit 10.45 percent.)
Spoiled by recent low rates
Real estate brokerage Redfin polled both seasoned and first-time homeowners in 22 major metro areas. Among the seasoned buyers, a quarter of them thought a rate below 5 percent was normal, while a third of first-timers thought that.
The Federal Reserve said in its latest meeting that it will begin tapering its easy money policies. The interest rate on the 30-year-mortgage rose 3 points to 4.58, according to the most recent Bankrate survey of large lenders.
Some folks are in for an awakening
Buyers' perception of what's normal when it comes to rates is important to the recovering housing market because they could retreat if they feel they are paying too much. More than 40 percent of the survey respondents said they would be unable or unwilling to buy a home if rates rose much higher than where they are.
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