US Housing Market Activity: A Surprisingly Resilient Market Despite High Mortgage Rates and Election Uncertainty

US Housing Market Activity - The Home Atlas

The U.S. housing market activity has shown unexpected resilience as we approach the 2024 presidential election, even amidst a backdrop of high mortgage rates. According to Redfin, the median sale price of homes has increased 5.5% year-over-year, with median asking prices also up by 5.9% over the same period. As mortgage rates hover around 7%, many would-be homebuyers and sellers have taken a cautious approach, waiting to see how economic policies and market conditions may shift post-election. Yet, the housing market activity remains steady, with pending sales showing a significant 4.5% year-over-year increase.

High Mortgage Rates and Election Anxiety’s Impact on Housing Market Activity

The surge in mortgage rates to 7% marks a notable increase from the low-6% range earlier in the summer, which had provided a short window of relief for homebuyers. This increase in rates, combined with the uncertainty surrounding the presidential election, has created a cautious environment for many prospective buyers and sellers. However, despite these pressures, the housing market has seen robust activity. New listings of homes for sale have increased by 3.4%, and active listings have risen by 14.8% year-over-year, a positive indicator of housing market activity.

Resilient Demand Amidst Higher Costs

Even with the increased cost of borrowing, demand has remained surprisingly strong. Redfin’s data reveals that homebuyer demand, measured through pending sales and new listings, has held steady. This demand comes at a time when the median monthly mortgage payment has surged to $2,593, a figure close to its peak in July, largely due to the elevated mortgage rates and persistent high home prices. In Redfin’s analysis, the resilience of the housing market can be attributed to various factors, including the readiness of some buyers to adapt to high rates as the new norm.

Trends in Home Listings and Buyer Behavior

One notable trend in housing market activity is the rate at which homes go under contract. As of October, 33% of pending sales went under contract within two weeks of listing, reflecting a steady pace despite the potential for an election-induced slowdown. This trend indicates that while some buyers may be holding back due to uncertainty, a significant portion of the market remains active. Redfin reports that new listings in key metros have also seen notable increases, with cities like San Jose, Seattle, and Washington, D.C., showing strong year-over-year growth.

The Election Effect on Housing Market Activity

The impending election has undoubtedly influenced housing market behavior. A recent survey by Redfin revealed that nearly one-quarter of first-time homebuyers are delaying their purchases until after the election. This hesitation is driven by concerns over potential economic policy changes and their impact on the housing market. However, experts believe this pause is temporary, with expectations that housing market activity will pick up once the election results are clear and market stability returns.

Housing Market Activity in the Face of Uncertainty

Housing market activity has proven to be resilient, even as high mortgage rates and election anxiety shape the landscape. As the market awaits the outcome of the 2024 presidential election, the current trends suggest that demand remains robust, albeit with a cautious edge. Whether this resilience will continue post-election remains to be seen, but for now, the U.S. housing market is holding strong. Redfin’s insights highlight a market where buyers and sellers are adapting to a new economic reality, showcasing the ongoing demand for housing across the nation.