Pending home sales soar as buyers return after election surge

In the United States, there has been a notable increase in pending home sales, with a rise of 12.1% year over year reported during the four weeks ending November 24, 2024. This increase marks the largest gain since May 2021, indicating a possible shift in the housing market dynamics. The surge in early-stage homebuying demand, including increased home tours, can be attributed partly to the developments surrounding the recent presidential election, which prompted many potential buyers to actively engage in the real estate market. In addition to the voting effects, the comparison period for these sales included the Thanksgiving holiday from the previous year, traditionally known for slow home sales. The data provided by Redfin, a technology-driven real estate brokerage firm, shows that while there was a significant uptick in pending transactions, it is essential to assess whether this trend will continue or if it is merely a seasonal anomaly. The closing of sales and actual market transactions will provide more clarity on the sustainability of this increase. Mortgage purchase applications have also seen a week-over-week increase of 12%, despite observing a tapering off in home tours and other indicators of early-stage demand. The Redfin Homebuyer Demand Index, a metric that tracks various buying signals, faced a decline to its lowest mark in over two months during the week ending November 24; however, it remains 7% higher than the previous year's figures. This juxtaposition of rising pending sales contrasted with a decline in the demand index reflects the complex nature of the current housing market situation in the U.S. On the supply side, new housing listings displayed a year-over-year increase of 10.6%, the most significant growth since April. The increase in listings, along with the holiday context of the previous year, suggests a potential shift towards a more favorable balance between supply and demand. Redfin analysts anticipate closer monitoring of upcoming trends to discern whether these recent developments signify a genuine revitalization of the housing market, or if they will revert following the post-election initial consumer enthusiasm.