Prospective home buyers are beginning to get serious, now dust from the presidential election is settling. Real estate brokerage Redfin saw its Homebuyer Demand Index jump more than 15% between November 7-11 to its highest level in a year-and-a-half, indicating more people were touring homes and researching for-sale listings online.
But, there's a catch.
“There’s no question we saw homebuying demand bounce back this past weekend, but it’s bouncing back to the level we would expect with 7% mortgage rates and not much higher,” said Chen Zhao, Redfin’s economic research lead.
Mortgage-rate locks for home purchases more than doubled from a month earlier as of November 12, according to Optimal Blue data. This jump in early-stage buying activity reflects pent-up demand being unleashed.
“House hunting activity was much slower than expected this summer and early fall, especially given that rates dropped down to the 6% range," Zhao added. "Buyers were waiting for the election to be over, and for the Fed to cut rates for the second month in a row. Both of those things happened last week, and now buyers don’t have much reason to wait–especially because we don’t expect rates to fall significantly anytime soon.”
The 30-year FRM averaged 6.78% as of November 14, down 0.1% from last week when it averaged 6.79%, according to Freddie Mac’s Primary Mortgage Market Survey.
“After a six-week climb, rates have leveled off, but overall affordability continues to be an issue for potential homebuyers,” Freddie Mac’s Chief Economist Sam Khater said. “Our latest research shows that mortgage payments compared to rents on the same homes are elevated relative to most of the last three decades."
The number of renter households rose 2.7% on an annual basis in the third quarter of 2024, climbing to a record 45.6 million. Renter households grew three times faster than homeowner households, which rose just 0.9% to a record 86.9 million last quarter.
Another Redfin survey conducted right after the election found that 22% of U.S. residents are more likely to consider moving now that the election is over.
Pending U.S. home sales rose 4.7% year over year during the four weeks ending November 10, in line with the increases seen over the last month.
