Homebuyers have been slow to emerge this spring, with many saying that the lack of available homes for sale is among their top frustrations. It’s no different at the top end of the market: Luxury buyers face the same hurdles.
In a survey by Realtor.com, 39 percent of respondents say they are currently or might be in the market for a luxury home, but 60 percent of them report difficulty finding the right property, either because it doesn’t meet the family’s needs or there aren’t enough available.
Respondents define luxury as carrying a purchase price of more than $1 million in expensive locations, such as the Pacific, Northeast and mountain regions, or more than $500,000 in the rest of the country.
The home also must have a chef’s kitchen, according to more than half the respondents, while 44 percent say the most important luxury feature is a stunning city, mountain or ocean view.
“We are seeing large portions of buyers throughout the country — from 23 percent in the Northeast region and 23 percent in the south Atlantic — eyeing these luxury homes,” Barbara O’Connor, chief marketing officer at Move Inc./Realtor.com, says in a release.
“The luxury homebuyer is an important contingent of today’s real estate market, as luxury homes tend to drive trends throughout the entire balance of the marketplace,” she adds.
Rising mortgage rates
This week, the Commerce Department and National Association of Realtors both reported weak sales of new and existing single-family homes as we head into the spring buying season. Aside from lack of inventory, reasons for the slowdown over the past few months include winter weather and higher mortgage rates.
While mortgage rates have been rising, luxury homebuyers can get nearly the same rate as a conventional buyer. The Bankrate analysis of large lenders shows that a 30-year jumbo mortgage rate is only 1 one-hundreth of a percent lower than the rate for a conventional 30-year fixed mortgage. Jumbo rates are typically on loans above $417,000.
Read more about whether rising rates will affect home sales.
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