Pent-up demand fuels a sharp rebound in home tours and sales activity after the election
After months of sluggish activity, homebuying demand is rebounding as buyers regain confidence following the recent presidential election.
According to Redfin, home tours and mortgage-rate locks surged in the days after the election, signaling renewed interest in the housing market despite ongoing challenges like high mortgage rates and steep home prices.
Redfin’s Homebuyer Demand Index, which tracks tours and other buyer activities, jumped over 15% between November 7 and 11, reaching its highest level in nearly 18 months. Similarly, data from Optimal Blue shows that mortgage-rate locks for home purchases more than doubled compared to a month earlier.
“Many house hunters took a break while they waited for the uncertainty surrounding the election to pass,” Redfin noted. An October survey by the company found that nearly 25% of prospective first-time buyers had decided to wait until after the election to continue their search.
Despite lingering challenges, such as elevated mortgage rates and home prices, buyers appear eager to move forward. A Redfin survey, conducted after the election, revealed that 22% of US residents are now more likely to consider moving.
Mortgage rates remain near their highest levels since July, keeping the typical US housing payment just $200 shy of its all-time peak. However, the recent Federal Reserve rate cuts and post-election clarity have pushed some buyers off the sidelines.
“There’s no question we saw homebuying demand bounce back this past weekend, but it’s bouncing back to the level we would expect with 7% mortgage rates and not much higher,” said Chen Zhao, Redfin’s economic research lead. “House hunting activity was much slower than expected this summer and early fall, especially given that rates dropped down to the 6% range. Buyers were waiting for the election to be over and for the Fed to cut rates for the second month in a row.
“Both of those things happened last week, and now buyers don’t have much reason to wait–especially because we don’t expect rates to fall significantly anytime soon.”
Read more: Fed in no rush to cut rates, says Powell
Pending home sales rose 4.7% year-over-year during the four weeks ending November 10, continuing a steady upward trend over the past month. While pending sales are a lagging indicator, the recent uptick in early-stage activity suggests stronger sales numbers could follow in the coming weeks.
On the supply side, new listings remained flat year-over-year, marking the first time in a year without an increase. This aligns with a broader trend of subdued listing growth, with most recent weeks showing increases of less than 1%.
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