Pending U.S. home sales rose 4.3 percent year-over-year during the four weeks ending Nov. 3, in line with the increases Redfin has seen over the last six weeks.
The fact that pending sales held up in the final run-up to the presidential election is somewhat surprising, Redfin said, especially considering this year’s election season was highly uncertain and anxiety-inducing.
Redfin economists said they would also expect high mortgage rates to deter buyers more than they have; mortgage rates have jumped to 7 percent over the last few weeks, pushing the typical monthly mortgage payment up near its highest level since July. However, the Federal Reserve announced a new .25-basis point rate cut on Nov. 8.
Redfin said results of the election are likely to push rates up for the foreseeable future; daily average mortgage rates already increased from 7.05 percent to 7.13 percent on Nov. 6. It’s worth noting one reason pending sales are up is is that they are being compared to a period last year when near-8 percent mortgage rates drove down sales.
But there are signs that house hunters at earlier phases of the homebuying process pressed pause as the presidential campaigns drew to a close and rates rose. Redfin’s Homebuyer Demand Index is at its lowest level since mid-September, and mortgage-purchase applications are down 5 percent week-over-week.
Redfin agents in places like Philadelphia, Phoenix, Atlanta and Charlotte, N.C., are reporting that a fair amount of prospective buyers sat on the sidelines over the last few weeks.
“Buyers have been jittery the last few weeks because of the election. Most of the buyers I’m meeting are looking at a house or two, then telling me they’ll be back in the new year,” Corey Stambaugh, a Redfin Premier agent in Charlotte, said in a release. “Some buyers are also bummed out by high mortgage rates, but they tend to understand that rates will change in the future and they’ll probably be able to refinance. Plus, most buyers are used to rates in the 6 percent to 7 percent range, and they’ve adjusted their budgets and expectations accordingly.”
On the selling side, new listings rose just 0.3 percent year-over-year, the smallest increase in a year. New listings stumbled partly because some sellers were waiting until after the presidential election to list their home.