The conclaves of both the Democratic and Republican parties have been concluded, ushering us into the countdown towards the highly anticipated November 3rd election. In a year that has tested the resilience of Americans, the trepidation surrounding substantial investments or purchases in these uncertain times is palpable. The reluctance to invest during an election year, however, is not a recent phenomenon. A report by BTIG, in January 2020, underscored the traditional fluctuation in consumer confidence between conservative and liberal voters during the October-to-November period of election years. While political divisions have grown starker since the 2016 elections, contemporary consumer surveys underscore the considerable influence the incoming administration has on voter confidence.
The Real Estate Market in Election Years
It's crucial to note that the unprecedented challenges faced in 2020 have only amplified the apprehension that usually characterizes election years. Skyrocketing unemployment rates, a tragic death toll of almost 200,000 Americans due to the pandemic, and persistent calls for racial justice have all compounded the strain. Amid such unpredictability, industries must rely on historical data and trends to plan their strategies. Presently, the housing market's resilience is a positive anomaly. As we moved from late February into this year, industry pundits attempted to forecast the housing market's trajectory, with some preparing for the worst. However, a short-lived dip notwithstanding, the market is only down 11.3% from 2019, with home values experiencing a 5.1% increase in August year-over-year. As we optimistically hope for the continuation of this upward trend, due in part to record-low interest rates, we must also anticipate a potential short-term decline. In contrast to the average 9.8% dip in new home sales from October to November during non-presidential election years, presidential election years have historically seen a 15% decrease. However, BTIG asserts that any downturn is likely to be fleeting, with the economy, employment rates, interest rates, and consumer confidence playing more substantial roles in the decision to purchase a home than the election result in the following months.
Is Now the Right Time to Buy?
Forecasting the economic climate at the end of 2020 is a challenging task given the many variables at play. However, this should not deter potential investors from exploring their options. We recommend consulting with a licensed professional to better understand your buying options and the potential benefits of investing sooner rather than later. The current real estate landscape is primarily a seller's market, owing to a limited inventory. As a result, buyers may have to submit multiple bids, often exceeding the listed price, to secure a property. That said, the record-low interest rates make this an opportune time for the purchase of second homes or investment properties.
Securing a Favorable Mortgage Rate
Even prior to the pandemic, many buyers preferred to assess their options and search for the best mortgage deals. At CrossCountry Mortgage, we offer a RateSafe solution designed to cater to your unique goals and needs. RateSafe is a 90-day interest rate lock-in feature that guarantees the interest rate offered to you will remain unchanged for 90 days as you search for your ideal home. With RateSafe, you can confidently explore the market, secure in the knowledge of what you can afford, and with no worries about fluctuating market conditions during the election period. The conditions are as follows:
- 90-Day Lock-In Commitment
- Minimum 620 Credit Score
- Occupying Home as Primary Residence is Mandatory
- No Manufactured Housing
- Condos, PUDs, 2-4 unit housing are all acceptable
- No Geographic Restrictions
- Eligible for Conventional, FHA, and VA loan programs
Final Thoughts
Ultimately, the decision lies with you. Your comfort level with investing in the current economic climate should not solely depend on the November election's outcome. Yes, there might be transient economic fluctuations during and briefly after the election. However, if historical trends are anything to go by, these election-related changes are likely to be short-lived and should not substantially affect housing prices or sales in the long term.
Are you prepared to capitalize on historically low rates? Reach out to a Mortgage Advisor at CrossCountry Mortgage today to learn more!
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