Let’s be real, folks. We’ve been living in a pandemic-induced bubble where mortgage rates have been lower than a limbo stick at a beach party. And let’s just say, it’s given homebuyers a bit of a skewed view of what’s considered a “normal” rate.

According to a survey by John Burns Research and Consulting, a whopping 71% of potential homebuyers would refuse to accept a 30-year fixed mortgage rate over 5.5%. Excuse me, Karen, but have you seen the current rate, which sits at around 6.4%? Looks like someone needs a reality check.

To make matters worse, 62% of these buyers believe that a “historically normal mortgage rate” is below 5.5%. Sorry to break it to you, but the average rate going back to 1971 is a whopping 7.75%, according to Freddie Mac. Ouch.

But hey, if home builders want to bring the rate below 5.5%, they’re seeing the most success. Looks like they’re buying mortgage rates down below 5.0%. Desperate times call for desperate measures, I suppose.

But here’s the tea: for most buyers, the mortgage rate is the determining factor in what they can afford. It’s all about that monthly payment, honey. So, with 71% of buyers demanding a rate below 5.5%, we might be seeing a lot more sideline sitting.

An April survey by U.S. News and World Report found that 66% of Americans planning to buy a home this year are waiting until the rates fall. I mean, can you blame them? Who doesn’t want a better deal?

But as Erika Giovanetti, loans expert at U.S. News, stated, “Today’s homebuyers are extremely sensitive to fluctuating interest rates, and a significant drop in mortgage rates would likely make the market more competitive.” Looks like we’re all waiting for a miracle.

And don’t get too excited that the Fed potentially won’t hike interest rates next month, because even if they don’t, the limited supply of homes for sale is a major obstacle for homebuyers. According to Redfin, new listings in the four weeks ended April 9 were 25% lower than the same time the previous year. Sheesh.

But hey, look on the bright side, potential home sellers. If mortgage rates do dip below 6%, it might just pique more buyers’ interest. Although, enough homeowners have rates in the 3% or 4% range that we’re unlikely to see a big uptick in new listings, according to Daryl Fairweather, chief economist at Redfin. So maybe just hang tight and enjoy your low rates while they last.

Serious News: cnbc