Rising rates didn't deter first-time buyers in '94, study says
Rising interest rates didn't scare first-time buyers away from the home market last year, according to a new national study.</br></br>Chicago Title and Trust Co.'s telephone survey of recent buyers found that 47.1 percent were first-time buyers, compared with 46 percent in 1993. Since first-time buyers are usually the most price-sensitive, last year's 2-percentage-point jump in mortgage rates to above 9 percent for a 30-year, fixed-rate loan could logically have been expected to push them out of the market.</br></br>But in an analysis of its survey results, Chicago Title speculated that because these buyers didn't have to sell their old home before buying a new one, they were in the best position early in the year to move quickly when it became obvious that rates were on the way up.</br></br>As the year wore on, first-time buyers chose adjustable-rate mortgages (ARMs) to keep their monthly mortgage payments down, said John Pfister, vice president and marketing research manager at Chicago Title.</br></br>The company, which sells title insurance, has been surveying buyers for 19 years and conducts its poll on a representative sampling of buyers in 18 major markets, including the Washington area.