{"id":178706,"date":"2024-11-01T12:19:36","date_gmt":"2024-11-01T18:19:36","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=178706"},"modified":"2024-11-01T14:20:39","modified_gmt":"2024-11-01T20:20:39","slug":"election-jitters-despite-rising-housing-activity","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/election-jitters-despite-rising-housing-activity","title":{"rendered":"Are Election Jitters Slowing Down the Housing Market? Housing Activity Data Tells a Different Story"},"content":{"rendered":"\n

As the U.S. anxiously awaits the <\/span>outcome of the presidential election<\/span> on Nov. 5, some of that anxiety is reportedly spilling over into the real estate market.<\/span> For some buyers, the uncertainty of the outcome is <\/span>proving to be<\/span> too much to make a home-purchasing decision before knowing what the future holds. <\/span><\/p>\n\n\n\n

Are election jitters <\/span>really<\/span> rocking the market? More importantly, is there a worrying trend <\/span>at work<\/span> here where the election outcome could derail the real estate market recovery we\u2019ve been witnessing lately?<\/span><\/p>\n\n\n\n

Election Anxiety and the Housing Market<\/span><\/h2>\n\n\n\n

Anecdotally, the election is giving many buyers pause. <\/span>According to an article from <\/span>Yahoo! Finance<\/span><\/a>, seasoned real estate agents across the country are reporting clients are holding off making any decisions and <\/span>not<\/span> following up on leads <\/span>until<\/span> the winner is announced on Nov. 5.<\/span> <\/span><\/p>\n\n\n\n

Without a doubt, some of those jittery homebuyers are<\/span>, in fact,<\/span> first-time buyers waiting to see if <\/span>Kamala Harris delivers on her promise of $25,000 down payment assistance<\/span><\/a>. Others <\/span>are hoping that<\/span> the outcome may influence interest rates <\/span>and\/or<\/span> home prices. <\/span><\/p>\n\n\n\n

Of course, housing itself isn\u2019t the only thing that buyers are worried about. The overall direction of the economy and how it will impact jobs and businesses is at the forefront of people\u2019s thoughts. Businesspeople especially seem to be anxious this time around. As Louisiana-based real estate agent Crystal Bonin told Yahoo!, \u201cPeople are like, \u2018I need to see who wins to know how it\u2019s going to affect me,\u2019 especially my business owners.\u201d <\/span><\/p>\n\n\n\n

With tax restructuring proposals from both candidates and with each positioning themselves as a champion of small business owners, it\u2019s no wonder that at least some people want to see how the promises and proposals will play out in reality. <\/span><\/p>\n\n\n\n

While a slight slowdown in homebuying activity is considered normal during an election, <\/span>this time,<\/span> it seems like everyone is presumably more wary than usual.<\/span> <\/span><\/p>\n\n\n\n

And yet, <\/span>the<\/span> latest housing market figures <\/span>we have<\/span> point in the opposite direction.<\/span> <\/span><\/p>\n\n\n\n

The Housing Market Remains Strong\u2014Jitters or No Jitters<\/span><\/h2>\n\n\n\n

According to the latest <\/span>housing market update from Redfin<\/span><\/a>, something remarkable is happening in the housing sector\u2014and it\u2019s pretty much the <\/span>exact<\/span> opposite of anecdotal evidence of <\/span>hesitation among buyers<\/span>.<\/span> A key metric of homebuying demand, pending sales, is up 3.5% year over year during the four weeks ending Oct. 20. <\/span><\/p>\n\n\n\n

Pending sales increased in 35 out of 50 metros<\/span>, as examined by Redfin<\/span>.<\/span> The last time pending sales grew in that many metros was in May 2021, at the height of the post-pandemic moving frenzy. Redfin also says the number of home tours is <\/span>strong<\/span> for this time of year, which is also remarkable because it bucks the <\/span>normal<\/span> trend of a seasonal slowdown of activity. <\/span><\/p>\n\n\n\n

Home sellers aren\u2019t shying away from the real estate market, either. New home listings grew 2.2% <\/span>year over year<\/span>\u2014a <\/span>small<\/span> increase, but an increase nonetheless. The median asking home price increased 6.1% year over year.    <\/span><\/p>\n\n\n\n

All of this is happening despite mortgage rates continuing a steady climb toward 6.44% as of Oct. 20, up from the two-year low of 6.08% at the end of September. Rising mortgage rates supposedly deter buyers more than other factors, but <\/span>it seems that<\/span> buyers just can\u2019t or don\u2019t want to wait for them to come down anymore. <\/span><\/p>\n\n\n\n

Whichever way you cut it,<\/span> the data isn\u2019t showing a market spooked by the election.<\/span> Even if buyers are worried about the election outcome, they\u2019re getting on with it anyway. <\/span><\/p>\n\n\n\n

Election anxiety may <\/span>actually<\/span> be a motivating factor for<\/span> some people: They think housing will become even more unaffordable following the election, so they\u2019re trying to get a home while they can.<\/span> Others <\/span>simply<\/span> may have hit the election fatigue stage: They\u2019ve seen\/read it all and want to move on with their lives, regardless of <\/span>what the election holds<\/span>.<\/span><\/p>\n\n\n\n

Will the Election Outcome Impact The Housing Market?<\/span><\/h2>\n\n\n\n

Some historical data points to a limited impact of elections on the housing market. Home sales typically go up in the year following an election: They did 9 times out of 11 since 1978, according to <\/span>data<\/span><\/a> from the Department of Housing and Urban Development (HUD) and the National Association of Realtors (NAR). <\/span><\/p>\n\n\n\n

House prices will likely <\/span>go up<\/span> too: They have done so in the year following seven <\/span>out<\/span> of the eight last presidential elections.<\/span> The only time they didn\u2019t was in the year following the 2008 financial crash.<\/span><\/p>\n\n\n\n

Even mortgage rates aren\u2019t <\/span>especially<\/span> affected by elections; if anything, they usually trend <\/span>down <\/span><\/em>in the following year. <\/span>Basically,<\/span> all this means we can expect a buoyant housing market regardless of the election outcome. <\/span><\/p>\n\n\n\n

Final Thoughts<\/span><\/h2>\n\n\n\n

This isn\u2019t to say <\/span>the next president\u2019s <\/span><\/a>long-term policies<\/span><\/a><\/em> won\u2019t affect the housing market. <\/span>Whether the winning candidate delivers on promises to expand homebuilding projects, repurpose federal land, increase government spending, or introduce rent controls would <\/span>all have significant impacts on<\/span> real estate.<\/span> However, these impacts won\u2019t be felt immediately; they take years to shape up. <\/span><\/p>\n\n\n\n

All this means buyers and investors are right to be concerned about the election outcome, but they have nothing to worry about <\/span>in terms of<\/span> the election itself impacting the market in the next year or so.<\/span><\/p>\n\n\n\n

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