• Key Insight: How young veterans are altering their homebuying timelines in a high-rate environment.
• Supporting Data: Only 32% of prospective homebuyers would wait for mortgage rates to fall before buying a home.

Fewer prospective homebuyers are holding out for lower mortgage rates, and young veterans are leading the shift to buying now, according to a new survey from Veterans United Home Loans.Only 32% of prospective buyers said they would wait for rates to fall before purchasing, down seven percentage points from a year ago. Among Gen Z veterans and service members, 23% plan to buy within the next three months, more than three times the 7% of Gen Z civilians who said the same. That gives Department of Veterans Affairs lenders a ready pool of near-term borrowers.

More than half of prospective homebuyers overall expect mortgage rates to be higher within the next year, up 12 percentage points from a year ago, according to Veterans United Home Loans third quarter survey. Meanwhile, only 32% would wait for mortgage rates to fall before buying a home, down seven percentage points year over year.

Nearly 75% of respondents said they plan to purchase within the next year as well.

"Buyers aren't expecting a perfect market," said Chris Birk, vice president of mortgage insight at Veterans United, in a press release Thursday. "More of them appear willing to make a move without waiting for rates or prices to fall. They're adjusting their expectations to the market that's in front of them."

The survey also revealed an opportunity particularly for Department of Veterans Affairs lenders. Among Gen Z veterans and service members, 60% said buying a home feels within reach, compared with 44% of their civilian counterparts. Gen Z military respondents are closer to buying as well, with 23% planning to purchase within the next three months, compared to 7% of civilians.

Among all veterans and service members surveyed, 82% said VA home loans give them an advantage in a tough market.

"For qualified veterans and service members, benefits like no down payment and no private mortgage insurance can provide more flexibility when it's time to buy," Birk said. "And in today's market, increased inventory and greater opportunities to negotiate seller concessions are giving veterans something many haven't had in recent years – more options, negotiating power and a better chance at finding the home they've always wanted."

Additionally, fewer prospective buyers said improved market conditions would motivate them to act. Just 43% cited lower interest rates as a reason to move forward, down six percentage points, while reduced home prices dropped from 51% to 47% and more housing inventory decreased four percentage points to 25% in the third quarter, according to the report.

Veterans and service members expressed less patience in waiting on home prices to move, as 32% would consider it, down from 39% in the second quarter. Civilians showed the larger drop in citing lower interest rates as a reason, from 48% to 39%, the survey found.

The report aligns with how Americans feel about the upcoming midterm elections. Nearly two-thirds doubt they will improve the housing market, signaling lenders should make a push for business now.