Inflation is causing one in four buyers to rethink their home buying timeline. 75% of home buyers said inflation is causing them to reconsider their home buying plans, according to a Redfin study.
- 30% of buyers are delaying their purchase
- 24% are moving their plans up
- 11% are cancelling their home buying plans
The way Americans interpret news about rising prices can have a variety of effects on their financial decisions, including homebuying… 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 – 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.Daryl Fairweather, Chief Economist at Redfin
This news comes as reports surface inflation is at it’s highest level in about 40 years, and prices are increasing 6.8% in November compared to last year. Adding on to price increases, gas and other energy sources also play a major role in driving inflation.
It is important to note that inflation’s impact on the decision to purchase a home isn’t always directly related to home prices. For about 75% of buyers gas prices caused them to rethink their home purchase when considering their commute.
Different homebuyers react to high fuel prices in different ways, depending on their circumstances… Some people will pay a premium to shorten their commute, while others will opt for a more affordable home to make up for expensive gas or a new – but more fuel-efficient – vehicle.Taylor Marr, Chief Economist at Redfin
When it comes to rising energy costs, about 35% of respondents to the Redfin survey said they will add energy-efficient features to their home, about 30% will look for a home that already has energy-efficient features, and 15% plan to search for a smaller home.