Homebuying Demand Holds Up Even As Election Uncertainty, Stronger-Than-Expected Economy Push Up Rate

October 27

Homebuying Demand Holds Up Even As Election Uncertainty, Stronger-Than-Expected Economy Push Up Rates

October 24, 2024 by Dana Anderson

Pending sales and home tours remain fairly strong as mortgage rates rise to their highest levels since mid-summer and uncertainty around the election picks up.

Pending U.S. home sales rose 3.5% year over year during the four weeks ending October 20, the biggest increase in three years (with the exception of the prior 4-week period, when they rose 3.7%). On a local level, pending sales are up in 35 of the 50 most populous U.S. metros, the most in three years.

Demand is also holding up at earlier stages of the homebuying process. Redfin’s Homebuyer Demand Index–a measure of tours and other buying services from Redfin agents–hit its highest level since May, and is up 3% year over year.

Redfin economists say pending sales and home tours are performing surprisingly well in the face of high housing costs and uncertainty surrounding the upcoming election. Chen Zhao, Redfin’s economic research lead, said she would expect a bigger dropoff in homebuying demand given how much mortgage rates have increased in the last few weeks. The weekly average mortgage rate is 6.44%, up from a two-year low of 6.08% at the end of September, and the daily average is 6.92%, its highest level since July.

Election uncertainty, stronger-than-expected economy are pushing mortgage rates up

Mortgage rates are jumping because investors’ expectations of the impending election are shifting, and because the most recent jobs and inflation reports showed the economy is a bit stronger than expected.

“Investors in the bond market are particularly worried about the possibility of increased government debt after the election,” Zhao said. “They’re concerned that one party could end up controlling both the White House and Congress, which would increase government spending more. That concern, along with strong economic data, is pushing up 10-year treasury yields and mortgage rates.”

High mortgage rates have pushed monthly housing payments near their highest level since July

Rising rates and stubbornly high home prices have pushed the median U.S. monthly housing payment to $2,587, the highest level since July (except the prior 4-week period, when the median payment was $2,591). Cash buyers may be propping up home sales: Mortgage-purchase applications fell 5% in the last week, dropping near their lowest level in a year, even as pending sales and early-stage demand hold up.

On the selling side, new listings of homes for sale are up 2.2% annually, one of the smallest increases in a year.

“There are buyers out there, especially for homes in desirable locations with highly rated schools and counties with lower taxes,” said Shari Mosteller, a Redfin Premier agent in Atlanta. “But more buyers are negotiating on price, asking for concessions and money toward closing costs. On my listings, I’m seeing a trend of buyers asking for minor repairs and/or cosmetic items. Many are getting creative with different types of mortgages, opting for an adjustable rate or a shorter loan period. That said, a fair amount of folks, both buyers and sellers, are waiting on the sidelines until after the election because they feel a lot of uncertainty in the housing market.”

For Redfin economists’ takes on the housing market, please visit Redfin’s “From Our Economists” page.

Leading indicators

Indicators of homebuying demand and activity
	Value (if applicable)	Recent change	Year-over-year change	Source
Daily average 30-year fixed mortgage rate	6.92% (Oct. 23)	Highest level since July	Down from 7.91%	Mortgage News Daily
Weekly average 30-year fixed mortgage rate	6.44% (week ending Oct. 17)	Up from 2-year low of 6.08% 3 weeks earlier	Down from 7.63%	Freddie Mac
Mortgage-purchase applications (seasonally adjusted)		Down 5% from a week earlier (as of week ending Oct. 18)	Up 3%	Mortgage Bankers Association
Redfin Homebuyer Demand Index (seasonally adjusted)		Up 7% from a month earlier (as of week ending Oct. 20)	Up 3% Highest level since May	Redfin Homebuyer Demand Index a measure of tours and other homebuying services from Redfin agents
Touring activity		Down 1% from the start of the year (as of Oct. 21)	At this time last year, it was down 13% from the start of 2023	ShowingTime, a home touring technology company
Google searches for “home for sale”		Up 4% from a month earlier (as of Oct. 21)	Down 8%	Google Trends

Key housing-market data

U.S. highlights: Four weeks ending Oct. 20, 2024 Redfin’s national metrics include data from 400+ U.S. metro areas, and is based on homes listed and/or sold during the period. Weekly housing-market data goes back through 2015. Subject to revision.
	Four weeks ending Oct. 20, 2024	Year-over-year change	Notes
Median sale price	$385,250	4.7%	Biggest increase since March
Median asking price	$399,098	6.1%	Biggest increase in 2 years
Median monthly mortgage payment	$2,587 at a 6.44% mortgage rate	-4.6%	Up from $2,487 a month earlier; near highest level since July
Pending sales	75,156	3.5%	Biggest increase in nearly 3 years (except the prior 4-week period, when they increased 3.7%)
New listings	84,285	2.2%	Smallest increase in a year (except the 4-week period ending August 25, when there was a 1.8% increase)
Active listings	1,029,151	15.2%	Smallest increase since March
Months of supply	4.1	+0.6 pts.	4 to 5 months of supply is considered balanced, with a lower number indicating seller’s market conditions.
Share of homes off market in two weeks	33.3%	Down from 38%
Median days on market	40	+7 days
Share of homes sold above list price	26%	Down from 30%
Average sale-to-list price ratio	98.8%	-0.3 pts.

Metro-level highlights: Four weeks ending Oct. 20, 2024 Redfin’s metro-level data includes the 50 most populous U.S. metros. Select metros may be excluded from time to time to ensure data accuracy.
	Metros with biggest year-over-year increases	Metros with biggest year-over-year decreases	Notes
Median sale price	Milwaukee (12.8%) Fort Lauderdale, FL (11.7%) Nassau County, NY (10.1%) Providence, RI (9.4%) Chicago (9.3%)	Austin, TX (-3.9%) San Antonio (-3.1%) San Francisco (-0.9%)	Declined in 3 metros
Pending sales	San Francisco (21.2%) Portland, OR (19.7%) Seattle (17.9%) San Jose, CA (16.5%) Anaheim, CA (16.2%)	Tampa, FL (-33.7%) West Palm Beach, FL (-19.8%) Fort Lauderdale, FL (-16.7%) Miami (-14.5%) Orlando, FL (-13.6%)	Increased in 35 metros The last time pending sales increased in this many metro areas was in May 2021
New listings	San Jose, CA (17.8%) Seattle (16.7%) Phoenix (16.7%) Baltimore, MD (16.3%) Anaheim, CA (15.1%)	Tampa, FL (-40%) Atlanta (-17.2%) West Palm Beach, FL (-14.4%) Orlando, FL (-12.5%) Fort Lauderdale, FL (-9.2%)	Declined in 9 metros