With just under a week left until this year’s election, what effect can you expect it to have on the real estate market? In a year that’s been full of negatives and uncertainty, that many people are ready to write off, the housing market has been one of the few positives during the COVID-19 pandemic. While the coronavirus has had devastating effects on much of the economy, the real estate market has remained strong, which at a glance, should be helping the economic security of U.S. homeowners.
Election Effects Are Usually Temporary
However, there are so many other variables occurring in this economic recovery. Which means, the benefits are not evenly dispersed - and feelings will vary dependent on how each individual voter is doing during this crisis, which shows no obvious boost to the incumbent Republican over his Democratic challenger. Effects brought on by an election are generally pretty temporary, with a rebound quickly following by December or January in many cases.
Home Sales Are Up
It was reported this week, by The National Association of Realtors, sales of existing homes in the U.S. rose sharply in September to levels that were unheard of over the last 14 years. With Americans’ homes tying up so much of their income and assets, that could be a great fiscal cushion in a greatly uncertain economic time.
Additionally, this has been a big boost for for builders; their level of confidence is unprecedented at the moment, according to the National Association of Home Builders, due to demands of a housing market that suffers greatly from a low inventory. Construction of single-family homes is moving at the fastest rate the U.S. has seen in 13 years.
However, these increases in sales were primarily in the upper end of the market, which makes little difference for some, but with median prices of existing homes being 15% more than last year, first-time buyers or those seeking inexpensive homes may be unable to compete in the market.
Sadly, The Election Results Won't Help Those Affected By Covid-19
Unfortunately, as with many times of hardship, this pandemic has disproportionately affected households with lower income, but the election is unlikely to make the situation worse for this group. This also goes for current homeowners who have become unemployed or had a large reduction in their pay during this time of crisis. These things will likely be on voters’ minds when they go to the polls November 3, but the housing market should remain strong.
Regrettably, for the moment, we do not yet know if the 3 million homeowners who were granted forbearance will be able to restart payments or if foreclosure suspensions will be prolonged.
The Real Estate Market Should Remain Constant Regardless Of Election Outcome
For the time being, there are more homeowners that are up to date with their mortgage payments. The amount of mortgages that are significantly late (those at least 90 days late) was on the downward trend in September for the first time since COVID-19 was labeled a pandemic.
With historically low interest rates, home ownership, especially for first-time buyers, has been on the rise. For either candidate, the possibilities will ultimately depend on how quickly and fully the economy can get back on its feet during and after the coronavirus pandemic. But the good news for those in real estate, you should be able to expect the market to remain constant no matter who wins on Tuesday.