US Pending Homes Sales Hold Steady, Despite Election Jitters and Mortgage Rates Above 7%

On Thursday, Redfin reported that according to its data, US pending home sales rose 4.3% year-over-year during the four weeks ending November 3rd, in line with the increases Redfin has seen over the last six weeks.

Redfin notes that the fact that pending sales held up in the final run-up to Tuesday’s presidential election is somewhat surprising, especially considering that this year’s election season was highly uncertain and anxiety-inducing. Redfin economists say they would also expect high mortgage rates to deter buyers more than they have; mortgage rates have jumped to 7% over the last few weeks, pushing the typical monthly mortgage payment up near its highest level since July. The results of the election are likely to push rates even higher for the foreseeable future; daily average mortgage rates already increased from 7.05% to 7.13% on Wednesday. It’s worth noting that one reason pending sales are up is that we’re comparing to a period last year when near-8% 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—a measure of tours and other buying services from Redfin agents—is at its lowest level since mid-September, and mortgage-purchase applications are down 5% weekly. Redfin agents in places like Philadelphia, Phoenix, Atlanta, and Charlotte are reporting that a fair amount of prospective buyers sat on the sidelines over the last few weeks.

Finally, Redfin pointed out that on the selling side, new listings rose just 0.3% year-over-year—the smallest increase in a year. New listings stumbled partly because some sellers were waiting until after Tuesday’s presidential election to list their home.