Weekly Housing Market Update: Election Puts Housing Supply and Affordability on the Radar
This week, the focus was on the presidential election—where the Republican Party was the clear voters’ choice, even though votes are still being tallied. Investors, markets, and businesses are already beginning to adjust to the implications; and for housing, the results are mixed.
President-elect Donald Trump was rightly vocal on the campaign trail about the need to improve housing affordability, a widely shared priority. And he has offered both supply- and demand-side solutions.
The Fed met in the days after the election and moved the policy rate down by a quarter-percentage point, which was widely expected. Smaller than the half-point cut in September, this adjustment is more typical.
But despite the Fed rate cut, longer-term interest rates, such as yields on the 10-year Treasury, have largely continued to climb, closing above 4.4% for the first time since July.
Mortgage rates mirrored this climb, hitting 6.79% this week, also a four-month high. Higher rates have led to a drop-off in mortgage applications for home purchases; but despite the week-to-week pullback, activity surpasses last year, when mortgage rates were substantially higher.
Despite the climb in rates over the past few weeks, in a pre-election survey, homebuyers were optimistic—with only 1 in 5 expecting rates to move higher in the next year.
Our weekly housing data shows that homes for sale continued to climb, along with a growing number of new sellers, compared with last year; but the gap was smaller than we’ve seen earlier in the year.
Nationwide, homes took more than a week longer to sell compared with one year ago, but in October’s Hottest Markets—mostly found in the Northeast and Midwest—homes still sell fast. Manchester-Nashua, NH, continued to rank as the No. 1 market.
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