Will There Be a Post-Election Home Sales Surge?

Hello everyone! Election season is officially upon us, and the recent debate didn’t quite hit the mark according to various news channels. Both sides seemed to lack constructive dialogue, which leaves the market facing potential uncertainty over the next few months. Rest assured, my team and I are here to guide you through it all 💪💪.

Wishing you an early Happy 4th of July 🎆! Enjoy the festivities with your loved ones and stay safe. I still remember the times as a kid when I nearly lost a finger to M-80 firecrackers 🧨.

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Rates ended HIGHER compared to last week, and volatility was LOW. Rates remain in the low-7 range for most loan types without paying discount points. Paying discount points can get you in high 6’s.

Post-Election Home Sales Surge?

With Thursday’s presidential election behind us, it's a great time to think about how such events typically impact the housing market. Historically, we often see a boost in home sales post-election. This increase is usually driven by a rise in consumer confidence, leading to significant financial decisions like home buying. The stability that comes with a settled election makes people more inclined to invest in real estate. Anecdotally, we often hear clients say they prefer to wait until after the election to decide on buying a home.

Looking ahead to 2025, interest rates will play a crucial role. Lower rates could attract more buyers, while higher rates might deter them. Housing affordability remains a critical issue; if home prices continue to rise faster than wages, many potential buyers could be priced out of the market.

It's also important to consider the overall economic landscape. While elections can boost market confidence, broader economic factors such as job growth, inflation, and consumer spending will ultimately shape the housing market's direction. Keep these elements in mind as you guide your clients and navigate the market in the coming months.

New & Existing Home Sales Slowing 🛑

Recent data reveals a slowdown in both new and existing home sales. According to government statistics, new home sales fell to 619,000 last month, missing expectations of 647,500. New homes now make up about 13% of the market, a trend that’s on the rise thanks to builder incentives and attractive financing options from in-house lenders.

Housing starts saw a decline of 5.5%, while building permits pulled back by 3.8%. Sales of previously occupied homes also fell for the third consecutive month in May, dropping 0.7% to an annual rate of 4.11 million. Despite this slowdown, home prices continue to climb, with the median sale price hitting a record $419,300.

Interestingly, the median price for new homes is now $417,400, making it CHEAPER to buy a new home than an existing one. This unusual scenario, last seen in 2021 and 2005, suggests new homes are becoming more attractive compared to older ones, potentially making it harder for existing homeowners to sell. Something is clearly wrong when new is cheaper than old.

Additionally, the demand for second-home mortgages has plummeted, reaching a six-year low in 2023 and expected to decline further in 2024. Vacation home mortgage demand has dropped by 65% compared to 2021, highlighting the challenges even affluent Americans face in the current housing market.

It's Job’s Week

We have a ton of important data points to start the 3rd quarter of 2024. Below is a snippet of the newsworthy events:

• Tuesday: Job openings report (expected 7.9M, previous 8.1M)

• Wednesday: ADP employment data (expected 170K, previous 152K), initial jobless claims.

• Thursday: July 4th Holiday

• Friday: US employment report (expected 195K, previous 272K), US unemployment rate (expected 4.0%, previous 4.0%.

Two Ways My Team & I Can Help

1. Lets collaborate- Schedule a zoom meeting

2. Tough Deal? Let us know if we can help