US Homebuyer Uncertainty Peaks Amid Rising Mortgage Rates, Bank of America Survey Finds

A recent Bank of America survey reveals that U.S. homebuyers and current homeowners are facing the highest uncertainty about the housing market since 2023, driven largely by surging mortgage rates. The survey, conducted among 2,000 respondents, showed that 60% are unsure if now is a good time to buy—a notable increase from 57% last year and 48% in 2023.

Experts attribute this uncertainty to fluctuating interest rates and persistently high home prices, which have cooled what is typically a busy spring home-buying season. Matt Vernon, Bank of America’s head of consumer lending, remarked, “We’re seeing a slower spring start compared to previous years.”

This slowdown contrasts sharply with the first quarter of 2024, which saw an 80% increase in mortgage applications, spurred by rising home inventory and lower bond yields. However, mortgage rates have climbed alongside the 10-year U.S. Treasury yield amid concerns about economic policies and fiscal challenges, contributing to market volatility.

Kara Ng, senior economist at Zillow, pointed out that despite improved affordability compared to last April, home sales have declined, largely due to broader economic uncertainty affecting consumers' confidence in their jobs and finances.

Despite the doubts, the survey revealed that 52% of potential buyers believe the market is better than a year ago. Moreover, 75% expect home prices and mortgage rates to decrease and are postponing purchases in anticipation, up from 62% in 2023.

Matt Vernon noted, “The current mortgage rate range of 6% to 7% appears to be the new normal, with buyers waiting for more favorable conditions before making their move.”