Post-Election Surge: Pending Home Sales Rise

The recent presidential election in the United States has had an unexpected impact on the housing market, particularly in the realm of pending home sales. According to a report by Redfin, the uncertainty surrounding the election was causing buyers to hesitate and pause their home searches. However, as the election results became clear, there was a surge in home tours, which subsequently translated into increased pending home sales.

Redfin's data shows that pending home sales rose by 4.3% year-over-year during the four weeks ending November 3. This increase was largely driven by a 25% spike in homebuyer demand over the weekend following the election. Buyers who had been on the sidelines, waiting for clarity on the election outcome, were now eager to re-enter the market. This surge in pending home sales indicates a level of resilience in the housing market, even in the face of uncertainty and high mortgage rates.

One of the key factors contributing to this post-election surge was the drop in mortgage rates. Although mortgage rates remain high, they have fallen from their peak, providing some relief for buyers. The average 30-year fixed mortgage rate dropped to 6.08% in late September, its lowest level in two years. This decline, coupled with the Fed's interest rate cut, enticed buyers back into the market. However, rates quickly rebounded, reaching 6.78% by October's end, which may dampen the sustainability of this factor.

The election outcome also played a role in boosting homebuyer confidence. As the election uncertainty subsided, buyers felt more comfortable making purchasing decisions. This is evident in the 4.3% year-over-year increase in pending sales during the four weeks ending November 3, 2022.

It is important to note that the increase in active listings and the slowdown in median days on the market also contributed to the rise in pending home sales. As more homes became available and took longer to sell, buyers had more options to consider, leading to a surge in home tours post-election. This trend suggests that the housing market is becoming more balanced, favoring buyers and potentially leading to more sustainable sales growth.

In conclusion, the post-election surge in home tours and the subsequent rise in pending home sales indicate a resilient housing market, despite the ongoing challenges of high mortgage rates and affordability concerns. As buyers gain confidence and more homes become available, the market can expect to see a more balanced dynamic, with implications for both buyers and sellers.