【Epoch Times, October 22, 2024】
This September witnessed a slight recovery in the U.S. housing market, but it appears to be a short-lived uptick as mortgage rates have surged back to high levels in recent weeks, dissuading potential buyers from entering the market. Besides the interest rate factor, there is another significant element freezing the market, discouraging people from conducting transactions. What factor is this? Let’s delve into the analysis.
According to the latest survey by real estate website Redfin, among 491 potential first-time homebuyers, nearly a quarter, 23%, indicated they would wait until after the presidential election to assess how the economy unfolds before making housing plans. Among them, 20.4% of supporters of Harris shared this view, while 25% of Trump’s supporters had the same perspective.
Furthermore, 26.1% of respondents stated they are waiting to see if Harris’s housing affordability plan will take effect, and 15.9% are observing if Trump wins, whether his housing plan will be implemented.
First-time homebuyers tend to be cautious when purchasing a property, especially amidst the deteriorating affordability in the U.S. market. People are inclined to wait for a more stable situation and government incentives before entering the market.
In the first 8 months of this year, only 2.5% of U.S. homes were transacted, marking the lowest turnover rate in decades. Among the survey respondents, the most common reasons for delaying home purchases were related to timing, with 30.3% stating they are saving to buy a home next year but not now. The next most common reason, at 28.9%, was hoping ‘things will get better if they wait.’
Evidently, many perceive the current timing as unfavorable for purchasing homes, particularly for first-time buyers due to high property prices, elevated interest rates, and burdensome affordability. Therefore, 18.3% of respondents in the survey are awaiting the Federal Reserve’s further interest rate cuts next year to bring down mortgage rates. Similarly, another proportion is awaiting whether the federal government will enforce an economic suitable housing plan. Furthermore, 23.6% of respondents noted they are waiting to see if city or state governments will advocate for more affordable housing initiatives.
In summary, this survey indicates that aside from the unfavorable timing, most people are anticipating various forms of economic assistance, such as waiting for winning candidates to introduce housing plans or for the government to promote economic housing types. Some are also applying for housing assistance from governmental or non-profit organizations.
An interesting aspect of this survey reveals that nearly one-eighth (12.2%) of respondents are immigrants or visa holders who are concerned about their long-term stay in the U.S. post-election if immigration policies become less favorable. This concern is evidently more prevalent among Trump supporters as he has consistently favored strict measures against illegal immigration.
Besides this survey on first-time homebuyers, Redfin also conducted polls targeting renters and homeowners, consisting of 894 U.S. renters and 805 homeowners aged between 18-65. They were asked to rank the importance of 14 questions related to supporting a candidate.
Overall, renters and homeowners exhibited similar responses on most issues, except for housing affordability which showed differing views. For the majority of respondents, the primary concern revolved around the economy, with nearly half (46%) ranking it among the top three issues. Following this, were concerns about inflation (40.4%), healthcare (26.3%), housing affordability (25.1%), and crime and safety (23.5%).
Specifically on the issue of housing affordability, nearly a third (31.6%) of renters prioritized this topic in their top three important issues. In contrast, only 17.1% of homeowners shared the same sentiment.
This disparity is understandable as homeowners already possess properties, reducing their urgency for home purchases, while renters often face difficulties in saving for a down payment. Hence, during this challenging housing period, most renters naturally prioritize housing affordability as a major concern.
Moreover, over half (52.1%) of homeowner respondents perceived their economic situation as improved compared to four years ago, whereas only 44.2% of renters shared the same sentiment. This discrepancy is partly attributed to soaring property prices, aiding homeowners in building substantial assets.
Additionally, Redfin’s analysis highlighted that supporters of Harris were more inclined than Trump’s supporters to prioritize housing affordability. Among respondents planning to vote for Harris, a quarter (25.1%) identified housing affordability as one of the top three issues, whereas this percentage stood at 20.4% among Trump’s potential voters. Redfin’s chief economist suggested this may be due to Democrats being more likely to reside in expensive coastal regions.
However, on a personal note, there seems to be more support for renters among Democrat voters, who are typically viewed as advocates for tenant protections, while Republicans are often perceived to have better relations with homeowners.
For homeowners, Redfin posed another question: “Regardless of who you plan to vote for, which candidate do you believe is most favorable for maintaining high property values?”
For homeowners, maintaining high property values typically bodes well as a significant portion of their wealth is tied to property equity. Hence, around two-fifths (41.6%) of U.S. homeowners deemed Trump as the optimal candidate for sustaining high property values, whereas 35.3% favored Harris.
However, statistics show that one-third of Americans do not own a home. Hence, another question in the survey was directed towards whom respondents believed was more suitable for helping them purchase a house. Nearly half of U.S. renters (49.9%) believed Harris would be more capable of making housing more affordable, while 31% favored Trump.
At the end of August,
Harris made the housing affordability crisis a core issue in her campaign, releasing an advertisement announcing new tax breaks and incentives to stimulate more new home constructions and aid first-time buyers in affording down payments.
In her housing campaign ad, Harris stated, “For most of my childhood, we were renters, my mother saved for over a decade to buy a home. I was just a teenager when that day finally arrived, and I vividly remember how excited she was.”
Harris also emphasized that the dream of homeownership is “unattainable for too many American families,” attributing the issue to “corporate landlords” purchasing properties and renting them out at exorbitant rates.
The Democrat vowed to “fight back” against this practice, mentioning her support for a federal bill that would eliminate crucial tax advantages for investors buying large quantities of single-family homes. Furthermore, she asserted that if elected, she intends to construct 3 million new homes within her first term.
The ad has been airing in crucial swing states, including Nevada and Arizona, where housing affordability lags significantly behind the national average.
However, a day after Harris’s new advertisement was released, Trump’s campaign team retaliated with its own television ad.
Trump’s ad comprised news clips emphasizing the staggering increase in property prices and mortgage rates in recent years, followed by statements from Trump and his campaign ally, Senator J.D. Vance, questioning why Harris, as the former Vice President, had not taken action on the issue during her tenure.
Trump remarked, “Kamala’s (referring to Harris) first day in office was three and a half years ago,” with Vance adding, “What have you been doing during this period?”
On the social media platform X, Trump directly responded to Harris’s post promoting her proposal to provide $25,000 in down payment assistance for first-time buyers.
Trump referenced her post and included a screenshot from Fox News showing that from January 2021 to June 2024, the median sales price of existing homes had surged by 39%.
These competing campaign ads underscore the primary theme on housing affordability between both candidates — Harris proposing comprehensive policy actions to address the housing market’s repair, while Trump critiquing her lack of action during her past term and attributing the crisis to the Democratic party.
Harris has unveiled significant policy measures regarding housing, though details remain scarce. Concerning her $25,000 down payment assistance proposal, it is currently unclear who qualifies for the assistance and whether these funds serve as upfront aid or deferred tax incentives.
Economists caution that the plan could inflate property prices, even though Harris’s campaign team indicates they will stagger assistance to buyers post-tax breaks to promote housing construction and balance market supply and demand dynamics.
In contrast, most of Trump’s statements on housing issues primarily focus on high property prices and mortgage rates, highlighting the challenges faced by homebuyers and attributing responsibility to Harris and President Joe Biden.
His campaign team asserts that Trump aims to reduce housing costs by halting illegal immigration and opening certain federal lands for construction. Trump also believes he can pressure the Federal Reserve to lower interest rates and keep inflation below 3%.
With the election day fast approaching on November 5, in the 7 competitive swing states, considered critical in this election, Realtor.com analysis indicates that Arizona, Georgia, and North Carolina have attracted Republican homebuyers. Conversely, Wisconsin and Nevada seem to be more favored by Democratic homebuyers.
The remaining swing states, Michigan and Pennsylvania, exhibit mixed outcomes, without displaying any distinct trends. If the other swing states vote according to their reported party lines, these two states may ultimately determine the election outcome.
Realtor.com’s chief economist remarks that the impact of migration on election results is a noteworthy topic, as population shifts may reshape political landscapes. Moreover, as more people cross state lines, their voting habits could influence the election, particularly in crucial swing states, where even minor changes in voter behavior could sway the election results. ◇