First-Time Homebuyers are Waiting for the Election
The recent Redfin survey, conducted by Ipsos in September 2024, reveals that nearly a quarter (23%) of prospective first-time homebuyers are postponing their home purchase until after the upcoming election. This survey, which included 1,802 U.S. homeowners and renters aged 18-65, focused on 491 respondents who plan to buy their first home within the next year. The primary reasons for this delay include uncertainties surrounding the election outcomes, personal financial readiness, and timing considerations.
Among the respondents, 26.1% are waiting to see if Kamala Harris’ housing affordability plan, which proposes $25,000 in downpayment assistance for some buyers, will be implemented. This option was more popular among Harris supporters, with 32.7% of them choosing it, compared to 21.6% of Trump supporters. Conversely, 15.9% of respondents are waiting to see if Donald Trump’s housing affordability initiatives will be enacted, with 25% of Trump voters selecting this option, compared to 11.5% of Harris voters.
Personal finances and timing are significant factors influencing the decision to delay home purchases. A notable 30.3% of respondents indicated they are on track with their financial savings to buy a home within the next year but prefer not to do so immediately. Additionally, 28.9% stated that waiting longer aligns better with their personal or family circumstances.
The survey also highlights that 12.2% of respondents, who are immigrants or visa-holders, are concerned about potential changes in immigration policies post-election, which could affect their ability to remain in the country long-term. This uncertainty adds another layer of complexity to their decision-making process.
Interest rate cuts and government assistance are also being considered by prospective buyers. About 18.3% of respondents are waiting for the Federal Reserve to cut interest rates, which could subsequently lower mortgage rates. An equal percentage of respondents are waiting to see if the federal government will introduce affordable housing initiatives, while 23.6% are looking to see if their city or state will advocate for more affordable housing measures.
Furthermore, 12% of respondents are awaiting responses to applications for government assistance, and 8.8% are waiting to hear back from non-profit organizations regarding assistance applications. These factors underscore the importance of financial support and policy changes in the decision-making process for first-time homebuyers.
The survey results reflect a broader trend of cautiousness among first-time homebuyers, driven by economic uncertainties and potential policy changes. The housing market has experienced a sluggish turnover rate, with only 2.5% of U.S. homes changing hands in the first eight months of 2024, marking the lowest turnover rate in decades. Despite a slight decrease in mortgage rates over the summer, the market remains slow, as buyers await more favorable conditions post-election.
In summary, the Redfin survey highlights the multifaceted considerations influencing first-time homebuyers' decisions to delay their purchases. These include election-related uncertainties, personal financial readiness, potential policy changes, and the broader economic environment. As the election approaches, these factors will continue to shape the housing market dynamics and the decisions of prospective buyers.
