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4 Reasons Why the Election Won’t Dampen the Housing Market

11/2/2020

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Tomorrow, Americans will decide our President for the next four years. That decision will have a major impact on many aspects of life in this country, but the residential real estate market will not be one of them.
Analysts will try to measure the impact feasible changes in regulations might have on housing, the effect of a possible first-time buyer program, and any number of other situations based on who wins. The housing market, however, will remain strong for four reasons:
1. Demand Is Strong among Millennials The nation's largest generation began entering the housing market last year as they reached the age to marry and have children - two key drivers of homeownership. As the Wall Street Journal recently reported:
“Millennials, long viewed as perennial home renters who were reluctant or unable to buy, are now emerging as a driving force in the U.S. housing market’s recent recovery.”

2. Mortgage Rates Are Historically Low All-time low interest rates are also driving demand across all generations. Strong demand created by this rate drop has countered other economic disruptions (e.g., pandemic, recession, record unemployment).
In addition, Freddie Mac just forecasted mortgage rates to remain low through next year:
“One of the main drivers of the strong housing recovery is historically low mortgage interest rates…Given weakness in the broader economy, the Federal Reserve’s signal that its policy rate will remain low until inflation picks up, and no signs of inflation, we forecast mortgage rates to remain flat over the next year. From the third quarter of 2020 through the end of 2021, we forecast mortgage rates to remain unchanged at 3%.”

3. Prices Continue to Appreciate The continued lack of supply of existing homes for sale coupled with the surge in buyer demand has experts forecasting strong price appreciation over the next twelve months.
4. History Says So Though it’s true that the market slows slightly in November when it’s a Presidential election year, the pace returns quickly. Here’s an explanation as to why from the Homebuilding Industry Report by BTIG:
“This may indicate that potential homebuyers may become more cautious in the face of national election uncertainty. This caution is temporary, and ultimately results in deferred sales, as the economy, jobs, interest rates and consumer confidence all have far more meaningful roles in the home purchase decision than a Presidential election result in the months that follow.”
Ali Wolf, Chief Economist for Meyers Research, also notes:
“History suggests that the slowdown is largely concentrated in the month of November. In fact, the year after a presidential election is the best of the four-year cycle. This suggests that demand for new housing is not lost because of election uncertainty, rather it gets pushed out to the following year as long as the economy stays on track.”
Bottom Line There’s no doubt this is one of the most contentious presidential elections in our nation’s history. The outcome will have a major impact on many sectors of the economy. However, as Matthew Speakman, an economist at Zillow, explained last week:
“While the path of the overall economy is likely to be most directly dictated by coronavirus-related and political developments in the coming months, recent trends suggest that the housing market – which has basically withstood every pandemic-related challenge to this point – will continue its strong momentum in the months to come.”
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    Sandy Winkler is Broker/Owner of Winkler Realty Group LLC.  Sandy has been an active Licensed Realtor since 2002 and earned her Broker's license in 2005.  She opened her own business in 2017 and currently works out of her office on the Island of Venice, doing what she loves to do:  Helping people buy and sell homes to make their dreams come true!

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  • Home Page
  • SELLERS
    • Whats My Home Worth
    • We Need Homes To Sell
    • Adding Curb Appeal to Your Home
    • Deep Clean When Your Home is For Sale
    • How To Attract More Buyers
    • Improve Your Odds of an Offer
    • Maximize Home Showings
    • Preparing for the Photo Shoot
    • Recognizing A Qualified Buyer
    • The Appraisal Process
    • Tips to Prepare Your Home For Sale
    • SellingorBuying
  • BUYERS
    • 7 Reasons to Own A Home
    • Alternative Financing
    • Appraisal Process
    • Cash To Close Program
    • Home Inspections What to Know
    • HomeOwners Insurance What to Know
    • Dream Home Worksheet
    • How Much House Can I Afford?
    • Preparing for House Hunting
    • Prepare to Buy a Home
    • Rent VS Buy
    • Title Insurance What to Know
  • FREE INFO
    • Coupons and Offers
    • GUIDES
    • Home Assessment
    • Home Tracker
    • Magazine
    • Neighborhood News
    • Neighborhood Alerts
    • Newsletter >
      • Newsletter Sign Up
  • Search for Homes
    • 1330 Cambridge Dr
    • Just Listed Sarsota County
    • Just Listed Venice Gardens
    • Englewood Homes For Sale
    • North Port Homes for Sale
    • Sarasota Homes For Sale
    • Venice Homes For Sale
    • Move to Florida
    • 2337 Bal Harbour Dr SOLD
    • 1644 Juniper Dr SOLD
    • 11087 Palmerston Ave SOLD
  • Contact Us
    • Join Us
    • ABOUT US
  • Blog
  • New Contruction SEARCH