A recent survey conducted by John Burns Real Estate Consulting asked home builders what they would expect if mortgage rates rose to five percent.
CEO John Burns says that the results of this survey, coupled with another recent survey of homebuyers, confirm that there would be "little impact" on builders if rates rose to five percent. The John Burns Real Estate Consulting survey of more than 300 builders showed that roughly 29 percent thought they would see little to no impact on sales, especially with wealthy homebuyers who are currently homeowners. About 56 percent of builders said "they would likely experience a 1 to 10 percent decline in sales volumes," though this would not precipitate a change in prices.
This thinking falls in line with our 4-5-6 rule, where one of the 4 disruptors (this time the economic disruption of rising mortgage rates) impacts each of the 5 life stages differently, which helps us answer several of the 6 key questions: who will be buying, what will they buy, when will they buy, and where will they buy. Rising mortgage rates do not impact everyone the same.
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