Mphasis: Prospective Home Buyers Worry About Costs, Insurance

(Image courtesy of Binyamin Mellish/pexels.com)

Mphasis Digital Risk, Maitland Fla., conducted a study finding that prospective home buyers say home insurance affordability is a major factor in where they decide to move.

Amid continued extreme weather events and much attention on the home insurance industry, almost half–47% of respondents–said home insurance costs will have “a lot” (18%) or “a good deal” (29%) of influence on where they move next.

A full one-quarter of respondents said they are considering moving due to extreme weather in their area; 26% report knowing of someone who moved due to home insurance costs.

Insurance isn’t the only issue top of mind for Americans–48% of respondents said they are challenged by home-related expenses, such as maintenance, utilities, taxes and fees.

In terms of what interest rate might cause prospective buyers to take the plunge–Mphasis referred to it as a “magic number”–42% said interest rates of 5%, 27% said interest rates of 4% and 20% said interest rates of 6%.

“Many prospective buyers started questioning the American dream of home ownership as inflation brough mortgage rates to a cyclical peak of 8% in October 2023, but now rates are down more than 1.5% from this peak,” said Jeff Taylor, Co-Founder and Managing Director of Mphasis Digital Risk. “We’re now getting closer to homebuyers’ comfort zone of low-6%, high-5% rates, and September’s anticipated Fed cuts should help buyer sentiment.”

Overall, just under 30% of respondents are considering a home purchase in the second half of 2024, and 40% said they would put off buying a home until after the presidential election.