Buying like it's 2021: Nearly half of recent buyers have a mortgage rate below 5%
Zillow's recent survey reveals that 45% of home buyers who purchased in the past year secured mortgage rates below 5%, despite current rates hovering near 7%. The most common method (35%) was through special financing from sellers or builders. Other strategies included rate buydown contingencies (26%), post-purchase refinancing (25%), and borrowing from friends/family (23%). This comes as mortgage rates surged from 2.65% in 2021 to 7.79% in fall 2023, causing typical mortgage payments to rise 115% from pre-pandemic levels.
Un recente sondaggio di Zillow rivela che il 45% degli acquirenti di case che hanno acquistato nell'ultimo anno ha ottenuto tassi ipotecari inferiori al 5%, nonostante i tassi attuali si aggirino intorno al 7%. Il metodo più comune (35%) è stato attraverso finanziamenti speciali da venditori o costruttori. Altre strategie includevano contingenze di abbattimento dei tassi (26%), rifinanziamento post-acquisto (25%) e prestiti da amici/familiari (23%). Questo avviene mentre i tassi ipotecari sono aumentati dal 2,65% nel 2021 al 7,79% nell'autunno del 2023, causando un aumento dei normali pagamenti ipotecari del 115% rispetto ai livelli pre-pandemia.
Una reciente encuesta de Zillow revela que el 45% de los compradores de viviendas que compraron en el último año aseguraron tasas hipotecarias por debajo del 5%, a pesar de que las tasas actuales rondan el 7%. El método más común (35%) fue a través de financiamiento especial de vendedores o constructores. Otras estrategias incluyeron contingencias de reducción de tasa (26%), refinanciamiento posterior a la compra (25%) y préstamos de amigos/familia (23%). Esto ocurre a medida que las tasas hipotecarias aumentaron del 2.65% en 2021 al 7.79% en el otoño de 2023, causando que los pagos hipotecarios típicos aumenten un 115% respecto a los niveles previos a la pandemia.
질로우(Zillow)의 최근 조사에 따르면, 지난 1년 동안 집을 구입한 구매자 중 45%가 현재 7%에 근접한 모기지 금리에도 불구하고 5% 미만의 금리로 대출을 secured 받았습니다. 가장 일반적인 방법(35%)은 판매자나 건축업자와의 특별 금융을 통해 이루어졌습니다. 기타 전략으로는 금리 인하 조건(26%), 구입 후 재융자(25%), 그리고 친구/가족에게 돈을 빌리는 것(23%)이 포함되었습니다. 이는 모기지 금리가 2021년 2.65%에서 2023년 가을 7.79%로 급증하면서, 일반적인 모기지 지불액이 팬데믹 전 수준에 비해 115% 증가한 것으로 나타났습니다.
Une récente enquête de Zillow révèle que 45% des acheteurs de maisons qui ont acheté au cours de la dernière année ont obtenu des taux hypothécaires inférieurs à 5%, malgré des taux actuels avoisinant les 7%. La méthode la plus courante (35%) était un financement spécial offert par des vendeurs ou des constructeurs. D'autres stratégies comprenaient des clauses de rachat de taux (26%), le refinancement après achat (25%) et des emprunts auprès d'amis/famille (23%). Cela se produit alors que les taux hypothécaires ont bondi de 2,65% en 2021 à 7,79% à l'automne 2023, entraînant une augmentation de 115% des paiements hypothécaires typiques par rapport aux niveaux d'avant la pandémie.
Eine aktuelle Umfrage von Zillow zeigt, dass 45% der Käufer, die im vergangenen Jahr ein Haus gekauft haben, Hypothekenzinsen unter 5% sichern konnten, obwohl die aktuellen Zinsen bei etwa 7% liegen. Die häufigste Methode (35%) war die Finanzierung durch spezielle Angebote von Verkäufern oder Bauherren. Weitere Strategien umfassten Zinsreduzierungsvereinbarungen (26%), Refinanzierungen nach dem Kauf (25%) und Kredite von Freunden/Familie (23%). Dies geschieht, während die Hypothekenzinsen von 2,65% im Jahr 2021 auf 7,79% im Herbst 2023 gestiegen sind, was zu einem Anstieg der typischen Hypothekenzahlungen um 115% im Vergleich zu den Vor-Pandemie-Niveaus geführt hat.
- 45% of recent buyers secured mortgage rates below 5%, showing successful adaptation to high-rate environment
- 35% of buyers obtained lower rates through seller/builder financing programs
- Multiple financing alternatives available (rate buydowns, refinancing, family loans) expanding buyer options
- Mortgage rates increased dramatically from 2.65% (2021) to 7.79% (fall 2023)
- Typical mortgage payments have more than doubled (115% increase) since pre-pandemic
- High rates are restricting buyer choices and preventing market entry for some buyers
Insights
The survey reveals significant market dynamics impacting both buyers and sellers in the current high-rate environment. 45% of recent buyers securing rates below
This trend signals a fundamental shift in housing market dynamics where creative financing is becoming a important competitive advantage. Sellers and builders are increasingly using rate buydowns and special financing as marketing tools, effectively creating a two-tier market: those who can access below-market rates and those who cannot. The data showing
For Zillow, this presents both opportunities and challenges. While their tools like BuyAbilitySM and rent reporting service align well with current market needs, the prevalence of below-market-rate deals could impact their revenue model tied to traditional mortgage partnerships.
The mortgage rate disparity revealed in this survey has significant implications for housing market liquidity and valuation models. With the typical mortgage payment having increased by
This bifurcation could create distortions in property valuations, as similar properties might trade at different prices based on available financing terms. The high proportion of buyers securing below-market rates through alternative means suggests a potential shadow subsidy in the market, which could be masking the full impact of monetary tightening on housing demand.
For investors, this trend indicates that traditional metrics for evaluating housing market health may need adjustment to account for the growing influence of creative financing arrangements.
New Zillow survey data finds many buyers are securing lower mortgage rates from home builders, sellers, or borrowing from friends or family members
- Although average mortgage rates are much higher,
45% of buyers who have purchased a home in the past year report having a rate below5% . - Mortgage rates rose from
2.65% in 2021 to7.79% in fall 2023, impacting home shoppers' buying power. The typical monthly mortgage payment has more than doubled since before the pandemic. - The most common way buyers have secured below-market rates is through special financing offers from sellers or home builders.
Mortgage rates surged from historic lows of
The unpredictable mortgage-rate landscape presents hurdles for home buyers, restricting their choices and, in some cases, preventing them from entering the housing market altogether. Despite these challenges, determined buyers are finding creative ways to afford their dream of homeownership.
Among recent buyers,
"This surprising finding really underscores the creativity of both buyers and sellers navigating today's dynamic real estate market," said Amanda Pendleton, Zillow's home trends expert. "Buyers are finding innovative ways to secure a lower mortgage rate, but sellers are also coming up with financing solutions to make their property more attractive to a potential buyer. Prospective home buyers should explore all the ways they can reduce their monthly payment to bring homeownership within reach."
Here are a few ways to secure a lower mortgage rate:
Focus on credit score. A higher credit score often leads to a lower interest rate. Buyers should prioritize boosting their credit score and maintaining it all the way through closing by refraining from opening new lines of credit or making large purchases. One way to build credit is through Zillow's rent reporting service. It allows renters who pay their rent on Zillow to build their credit when they make on-time rent payments.
Additionally, Zillow Home Loans's BuyAbilitySM tool offers buyers a personalized assessment of suitable home prices and monthly payments that align with their financial capabilities. By considering factors like the buyer's credit score, income and down payment, and by using current mortgage rates, this tool provides home shoppers with a comprehensive understanding of their purchasing potential.
Look into rate buydowns and mortgage points. Consider mortgage rate buydowns or purchasing mortgage points to lower interest costs on your loan. A rate buydown involves an initial payment for reduced rates in the early loan years, while buying points results in ongoing savings on monthly payments throughout the term of the loan. When buying a new-construction home, the builder may cover these costs as incentives. If this is not the case, negotiating with the seller or builder is always an option.
It's crucial for home buyers to evaluate the break-even timeline — the point at which the savings from these strategies equal the associated costs. For personalized guidance, buyers should seek advice from a trusted loan officer.
Put more money down. Increasing the down payment decreases the loan size and the risk for the lender, which may mean they can offer a lower mortgage rate. However, saving for a down payment to even qualify for a loan can be a significant challenge for home buyers —
Consider house hacking. If it aligns with a buyer's lifestyle, renting out rooms in their home to produce rental income can reduce their mortgage rate. Recent mortgage buyers who included projected rental income in their application were more likely to secure a mortgage rate below
Check out nontraditional loan types. A 30-year, fixed-rate mortgage is the most common loan type, but there are others. An adjustable rate mortgage (ARM) features an initial lower interest rate that can change to the market rate after a fixed period, typically three, five, seven or 10 years. The primary risk of an ARM is that rates could be higher when the initial period ends, leading to higher payments.
Another option for home buyers to explore is a shorter loan term, such as a 15-year mortgage. These shorter loans come with much higher monthly payments, because the loan is being paid off more quickly, but markedly lower interest rates, meaning less of a homeowner's monthly payment is going toward interest. To assess affordability and determine the best course of action, consulting a loan officer is recommended to make a well-informed decision tailored to a borrower's personalized monthly budget.
Mortgage | Share of | Share of | Share of | Share of | Share of Projected |
< | 2 % | 4 % | 4 % | 2 % | 3 % |
4 % | 6 % | 4 % | 7 % | 6 % | |
16 % | 24 % | 21 % | 23 % | 22 % | |
22 % | 29 % | 28 % | 33 % | 28 % | |
20 % | 19 % | 22 % | 21 % | 20 % | |
24 % | 12 % | 16 % | 10 % | 14 % | |
12 % | 6 % | 6 % | 5 % | 7 % | |
NET: < | 45 % | 63 % | 57 % | 65 % | 59 % |
NET | 55 % | 37 % | 43 % | 35 % | 41 % |
*Source: Zillow Consumer Housing Trends Report 2024
About Zillow Group:
Zillow Group, Inc. (Nasdaq: Z and ZG) is reimagining real estate to make home a reality for more and more people. As the most visited real estate website in
Zillow Group's affiliates, subsidiaries and brands include Zillow®, Zillow Premier Agent®, Zillow Home Loans℠, Zillow Rentals®, Trulia®, Out East®, StreetEasy®, HotPads®, ShowingTime+℠, Spruce® and Follow Up Boss®.
All marks herein are owned by MFTB Holdco, Inc., a Zillow affiliate. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org). © 2024 MFTB Holdco, Inc., a Zillow affiliate.
1 Zillow Consumer Housing Trends Report 2024.
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SOURCE Zillow, Inc.
FAQ
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