Be prepared to offer young home buyers more reassurance in the wake of the Federal Reserve’s decision to raise interest rates. Millennials are more concerned than any other age group about how the Fed’s move will affect their buying power, according to a new Berkshire Hathaway HomeServices survey.
Sixty percent of millennials say they would feel “anxious” if mortgage rates were to rise compared to 39 percent of all other ages surveyed. Sixty-six percent of millennials say higher mortgage rates would “somewhat impact” or have a “strong impact” on their lives compared to 43 percent of the overall population. Berkshire surveyed more than 2,500 people across the country; millennials were defined as ages 18 to 34.
More than half of millennials surveyed say they are worried that a rise in mortgage payments would impact their ability to save. They also say that aside from buying a home, rising rates would make it tougher to purchase a new car, get loans, and finance vacations.
Young buyers may have grown too accustomed to record-low rates in recent years, believing that they are normal. The survey asked whether millennials perceived current mortgage rates to be low, average, or high: 51 percent chose “average,” 14 percent picked “low,” and 23 percent said “high.” Thirty-nine percent of all survey respondents perceived rates as low while 38 percent said they were average.
Half of millennials didn’t even realize they’d had it so good: 50 percent indicated they were unaware that mortgage rates had been at historic lows in recent years.