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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 56 January 2024 J O U R N A L PROSPECTIVE HOMEBUYERS' PATIENCE MAY BE WANING P rospective homebuyers' patience may be waning, with fewer willing to wait until home prices or interest rates come down to purchase a home, according to new data from the Bank of America (BofA) Homebuyer Insights Report. The report showed that some 62% of respondents are willing to wait for prices and/or rates to fall before buying a home, down from 85% just six months ago. And they seem to be acting. Sales of new single-family houses in September 2023 were a seasonally adjusted 759,000, up from 679,00 sales in April 2023. "When it comes down to it, if buying a home is your goal and within your budget, the best time to buy is when you're ready financially and you can find a home that fits your needs," says Matt Vernon, Head of Consumer Lending at BofA. "Even in the current interest rate environment, there are clear benefits to purchasing a home and beginning to build equity." This latest research also explores what buyers would be willing to forgo in order to buy sooner, and what would motivate current homeowners to sell. Approximately 80% of outstanding U.S. mortgages have an interest rate below 5%. This gives homeowners an incentive to stay put because the average 30-year fixed mortgage rate hit 8% in October of this year. Younger people— millennials in particular—are being hurt disproportionally by this trend, accord- ing to Bank of America Institute's newly released Housing Morsel. Lending/Originations The rate disparity is compressing the already limited supply of houses for sale, and begs the question: What does inspire homeowners to sell and free up invento- ry for would-be homebuyers in today's environment? What Would Make Homeowners Sell? Half of current homeowners say they'd be prompted to sell if their dream home became available (50%) and/or if they found a more affordable area (54%)—even if it meant paying a higher interest rate for a new mortgage. Addi- tional motivations for some, but not as many, to move and give up their current mortgage rate include: » Job opportunity or job relocation (40%) » Nicer neighborhood amenities (40%) » The need for a larger home or more rooms (38%) » A social community to be a part of (32%) » A desire to be adventurous and move to a new area (28%) » Moving to a home with rental poten- tial (21%) In fact, millions of people are moving to areas, including the Sun Belt, where they can afford to buy a home. Those surveyed say the following could or al- ready has motivated them to move from one state to another: » Cost of living (60%) » Career/job reasons (44%) » Family and relationships (37%) » Affordability of housing (33%) » Safety concerns (27%) » Retirement (25%) » Adventure and exploration (20%) Work-related reasons may also in- spire homeowners to sell in this market, and work is a major driver of out-of-state moves. Those who have or would move to a new state for their careers are driven by increased job opportunities (57%), job requirements to relocate (29%), or the fact that they can work remotely and are no longer tied to an office (28%). Overall, regional labor market