Rising rates and the US economy
- 55% or 136.30 million Americans plan to buy property in the near future
- 60% of which, or 81.78 million people, will hold off buying if interest rates rise in December 2016
- Those who still live at home with parents are more likely to prolong moving out and buying property if rates rise, compared to those currently renting or own a home
- Women are more scared of buying property if rates rise than men
- Those who earn more income are less deterred by rising rates
It’s widely predicted that the Federal Reserve will increase the Federal Funds Rate next month, with CME group currently forecasting a 100% chance of a 25 basis point rise. Other sources also reporting a likely hike, with the Wall Street Journal’s Economic Forecasting Survey found 54 of the 57 economists surveyed in October (95%) predicting a rate rise of 24 basis points.
The last time the Federal Funds Rate increased was in December 2015, which moved by 25 basis points.
Further findings below:
- Out of those who are planning to buy property in the near future, adults who still live at home with their parents are most likely to hold off buying if interest rates were to climb this December, with 68% saying they’d wait, compared to 57% of renters and 51% for those who already own a home.
- Females are more deterred than men to purchase property in the wake of a rate rise, with 61% saying they’d hold off as oppose to 57% for men.
- Baby Boomers are least likely to put off purchasing a property if the Federal Reserve were to lift interest rates, with 44% stating they would not hold off.
- While Baby Boomers are least likely to hesitate if rates are to rise, 32% of Baby Boomers don’t plan on buying a home at all, compared to 13% of Gen-X and 6% of Gen-Y.
- 58% of parents surveyed said that they’d press pause on purchasing a property if rates were to rise.
- Unsurprisingly, those who earn more money are less deterred by rising interest rates. 68% of Americans who earn up to $50,000 will hold off buying a home if rates rise, while 58% of those earning between $50,000 and $100,000 will postpone, and just 40% of those earning over $100,000 will put off buying a home.
- 55% of Americans surveyed are planning to buy a home in the near future
- 12% in the next 12 months
- 12% in the next 1-2 years
- 15% in the next 2-5 years
- 17% plan to in the future, but not sure when
- After the birth of a third child, parents responded that they became consecutively less inclined to purchase a home with each consecutive child they had.
- Although 39% of both men and women equally own their home, more men still live at home compared to their female counterparts (26% compared to 19%)
- Those living at home with family are most likely to be planning to buy a home in the next 12 months (16%), compared to those renting (15%) and those who already own property (6%).