Changing Borrower Preferences: Impact on Mortgage Rates and Homebuying

Today's homebuyers have a skewed view of what "normal" mortgage rates are, with 71% saying they will not accept a 30-year fixed mortgage rate over 5.5%, according to a survey by John Burns Research and Consulting. The majority of buyers believe that a "historically normal mortgage rate" was below 5.5%, while the average going back to 1971 is 7.75%, according to Freddie Mac. This sensitivity to mortgage rates is contributing to the severe lack of supply on the market, with new listings in the four weeks ended April 9 being 25% lower than the same week the year before, according to Redfin.