In the weeks following the 2024 U.S. presidential election, there has been a noticeable increase in pending home sales across the country. This surge, recorded as a 12.1% year-over-year rise, marks the largest increase in pending sales since May 2021. Several factors contribute to this surge, with a significant one being the strong early-stage homebuying demand following the election. This uptick in home tours and buying activity is now translating into actual sales, signaling a shift in the housing market that could shape the remainder of the year.
Key Drivers Behind the Surge in Pending Home Sales
The recent surge in pending home sales can be attributed to a combination of factors. First, there was a sharp increase in home tours and early-stage demand after the presidential election, which saw prospective buyers engaging more actively in the housing market. However, it is important to consider that this period also compared against a time in 2023 when home sales were unusually slow due to the Thanksgiving holiday. This contrast has further magnified the increase in pending sales.
In addition, mortgage purchase applications have risen by 12% week-over-week, indicating that buyers are starting to commit despite some fluctuations in market conditions. While pending home sales have shown strong growth, there has been a slight dip in homebuyer demand indexes. Redfin’s Homebuyer Demand Index, which tracks tours and buying services, fell to its lowest level in over two months in late November, though it still remains higher year-over-year.
Will This Increase in Pending Home Sales Last?
The big question remains: will this increase in pending home sales continue? Experts are cautiously optimistic, noting that while the current figures look promising, there are signs of tapering activity in the weeks following the initial post-election surge. The recent increase in mortgage applications and pending home sales could just be a short-lived spike following the election, or it may signal a more sustained trend of recovery in the housing market. In the coming weeks, more data will be available to confirm whether these trends hold true.
On the selling side, new listings have also seen a significant jump, up 10.6% year-over-year, the largest increase since April. However, much like pending sales, this improvement may be influenced by the unique timing of the 2023 Thanksgiving period. It remains to be seen whether this uptick will be sustained in the long term.
A Sign of Stabilization or Temporary Boost?
The increase in pending home sales following the 2024 election represents a positive shift in the housing market, bolstered by strong early-stage demand. As mortgage applications rise and listings increase, the potential for sustained market recovery looks promising, although careful observation over the next few months will be crucial to determining whether this momentum continues.
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