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Just when you thought the housing market couldn’t get any hotter, the prospect of rising mortgage rates had buyers even more frenzied in March, according to a report out Friday.
The monthly survey of real estate agents from Credit Suisse showed that an index of buyer traffic around the country rose 2 points to 50, on a scale where 50 indicates a neutral reading. As always, there was great regional variety, but as Credit Suisse put it, agents’ commentary “remains centered on pent-up demand, especially in more affordable price points, given the persistent inventory shortage.”
The threat of rising mortgage rates is also starting to be felt. That “got many buyers off the fence,” as one survey respondent in Houston said. In 36 metro areas Credit Suisse surveys, 23 said incoming rate increases were motivating buyers. Still, as one Seattle real estate agent put it, “Rate increases are causing a sense of urgency, but there is not enough inventory to sell.”
And Credit Suisse also made note of a theme that’s starting to gain as much traction as the notion of scarce inventory: “In several markets spanning the Southern U.S., agents noted in-migration – driven by employment and lifestyle changes – is supporting ongoing gains in traffic as we move into spring.” That’s a theme MarketWatch has covered recently.
And for buyers who can’t move across the country for more reasonable prices, Credit Suisse’s survey found more house-hunters going back to a tried-and-true way of landing more affordable housing. What they call “a greater willingness among buyers to move further out to the periphery” was known as “driving until you qualify” a decade ago.
Here are some selected local highlights from the March survey, along with Credit Suisse’s proprietary traffic index data for each.
| City | Traffic index | Comments |
| Boston | 36 | “Continued shortage of available inventory is leading some buyers to abandon their search.”
“Rising prices and the uptick in interest rates are pushing the bottom tier out of the marketplace.” “Buyers looking at homes in further out areas in order to compete with rising rates.” |
| Chicago | 38 | “First-time and move-up buyers are coming on strong while the luxury buyers are languishing.”“Buyer optimism amidst low levels of inventory.” |
| Denver | 46 | “Prices being bid up well beyond the list price.” |
| Fort Myers | 50 | “Clients appear to feel more confident in the economy.”
“Colder weather in the Northeast states driving more snowbirds to the area.” |
| Houston | 54 | “Continued corporate relocations to the area.” |
| Inland Empire, California | 25 | “Rates causing buyers to purchase smaller or older homes, or move further out.”
“Buyers will purchase what they can afford given rising rates; homes will be smaller and locations outside of previously considered areas.” |
| Jacksonville | 75 | “Good economy and still affordable price points.”
“Corporate growth in the area.” |
| Las Vegas | 38 | “Open house traffic much higher than last year and more interest in entry level homes.”
“People moving to the county in droves!” “Higher prices and shortage of available inventory.” |
| Miami | 30 | “Lenders tight on buyer qualifications and property conditions.”
“First-time buyers concerned over rising rates although higher end buyers more motivated to purchase.” |
| Minneapolis | 63 | “Clients that have been dragging their feet now cannot afford as much.” |
| Nashville | 21 | “More people moving into the area.”
“Seeing an increase in seller paid closing costs and additional financial assistance on behalf of buyers.” |
| New York-Northern New Jersey | 47 | “Many buyers interested in purchasing homes outside the state, in places like North Carolina.” |
| Phoenix | 71 | “Buyers willing to go further out to get a larger home.” |
| Raleigh | 67 | Lack of inventory and frenzied buying.”
“Some buyers moving towards variable rate mortgage products offered by credit unions.” |
| Sacramento | 77 | “More people and companies moving to the area.”
“Buyers are lowering their expectations, sacrificing either square footage or location to meet price points.” |
| San Antonio | 60 | “Retirees looking to move to the area due to the climate and the fairly low cost of living.”
“Buyers qualifying for lower amounts.” |
| San Diego | 46 | “Buyers more concerned with HOA fees than rates.”
“Seeing movement to lower priced areas if anything is available.” “Buyers willing to move further from the city.” |
| Virginia Beach | 50 | “Large influx of low quality new construction which is outperforming the sales of existing homes.”
“Buyers having sticker shock over rising home prices.” |
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