Inflation concerns are influencing plans for homebuyers and sellers, according to a recent Redfin survey. In fact, 73% of respondents said they’re delaying, canceling or moving up future buying and selling plans.
The survey found that while 27% of respondents said inflation had no effect on their home buying or selling plans, nearly three-quarters of those surveyed said just the opposite. Inflation delayed homebuying plans for 27% of those surveyed, accelerated homebuying plans for 24% and caused 11% to cancel their purchase plans altogether. On the sell side, inflation fears caused 10% of homeowners to move up plans to sell, 7% to delay selling and 3% to cancel a sale.
Mortgage rates and interest rates have continued to rise as in the face of inflation, which is at its highest level in four decades. Fuel and energy prices are also increasing, and those rising prices can have a variety of effects on homebuying decisions, said Redfin chief economist Daryl Fairweather.
“Some people may delay buying because they’re worried that with prices rising on everything from food to fuel, now is not the right time to make a huge purchase,” he said. “But others might move faster to find a house because they’re worried home prices and rent prices will increase even more, and they want to lock in a fixed payment.”
Rising gas prices are affecting home-buying decisions or their commute, according to 73% of survey respondents. Twenty-one percent of those surveyed plan to buy a less-expensive home. Twenty-five percent said they plan to shorten their commute, while 35% plan to drive less or drive a more efficient vehicle, according to the survey.
Increasing home energy costs are also impacting decisions, with 36% of those surveyed planning to add energy-saving features to their home, while 33% plan to move to a more fuel-efficient home and 15% are looking to downsize.