Mortgage rates aren’t hampering millennials’ homebuying interest

Millennials are the only generation showing increased interest in buying a home in the next six months, according to a new survey by Realtor.com.

The survey, conducted this spring, found that 23% of millennials plan to buy a home, up from 15% in September 2024. By contrast, 69% of Americans across all generations said they are not planning a real estate transaction in the next six months.

High mortgage rates remain a major obstacle across the market. One-third of respondents said they have delayed a home purchase due to current rates — a figure unchanged from last fall’s survey.

Waiting for better rates

More than half of millennial and Gen Z respondents said they have postponed buying a home because of mortgage rates, with Gen Z showing particular caution. Gen Z respondents reported an increased preference for renting and a higher likelihood of delaying a home purchase compared to September 2024.

Overall, 67% of survey respondents said mortgage rates have influenced their decision to buy a home. Baby boomers are the least affected, with 41% saying that rates do not impact their plans. Only 2% of all respondents are considering buying a home if mortgage rates exceed 6%. Most (63%) said they are waiting for rates below 5% before making a purchase.

“Despite current market challenges and persistently high mortgage rates, Millennials are showing a notable increase in home buying interest this spring compared to last fall,” said Laura Eddy, vice president of research and insights at Realtor.com.

“Even though we found a change in Millennial homebuying intent, the influence of mortgage rates cannot be overstated, with the vast majority of Americans, including Millennials, prioritizing lower rates before committing to a purchase. The lock-in effect is still very much in effect.”

The survey also looked at how people finance home purchases.

A majority (57%) said they use personal savings. Another 15% tap into personal investments or retirement accounts, and 12% rely on gifts or loans from family members. Among those planning to buy a home, one in four said they plan to use retirement accounts or personal investments for financing.

Sellers cautious but motivated

Realtor.com’s separate survey of potential sellers found that half of homeowners with a mortgage feel locked in by high mortgage rates. That sentiment is stronger among those who have been thinking about selling for more than a year.

Expectations about future interest rates influence sellers’ plans.

Among potential sellers who think that rates will rise in the next 12 months, 43% said this expectation makes them more likely to sell, while 20% said it decreases their likelihood. In contrast, 69% of potential sellers who think rates will decline said that expectation increases their likelihood to sell.

“Across much of our research we see a trend where potential homebuyers feel stuck when it comes to buying a home due to their current mortgage rate,” said Hannah Jones, senior research analyst at Realtor.com. “Mortgage rates on top of an insufficient supply of budget-friendly homes complicates the affordability picture for many homeowners, especially first-time homebuyers who do not have equity from their existing home to help offset mortgage rates.

“However, we expect that this lock-in effect will ease as more homeowners grow tired of waiting for significant rate changes and as life factors such as jobs, kids and retirements drive more to make a home purchase.”

Buyers and sellers alike remain sensitive to mortgage rate changes.

The survey found that 78% of potential sellers believe rates will stay the same or rise in the next year. The expectation of rate shifts continues to shape decisions in a market driven by high borrowing costs and limited housing supply.