It should be noted that fall is traditionally a slower time for home sales, as prospective new homeowners are wary of moving at a time when the weather is getting colder. But this year, the data indicates that buyers are extra cautious, likely due to the coming election in November.
Political uncertainties have been coupled with the possibility of a Federal Reserve interest rate cut this September and confusion regarding new rules for home buying brought on by a recent legal dispute that has entangled the National Association of Realtors. This has led to applications for mortgages in August to fall to their lowest level since October 2023, when mortgage rates neared eight percent.
"Nobody knows what's going to happen," said Nicole Stewart, a real estate agent who works for the brokerage firm Redfin and has been in the industry for a decade, who noted that this lull in homebuying is typical during presidential elections.
"When there's uncertainty, people are less inclined to make large purchases," she added. "Whether it's cars, homes, they don't do a lot of big life adjustments until they are comfortable."
Economists skeptical of proposed plans to lower housing costs
The lack of affordable housing has become a top concern among voters, and both Vice President Kamala Harris and former President Donald Trump have vowed to fix the housing affordability crisis if they are elected. However, both of their proposed solutions have drawn skepticism from economists.
Harris is proposing a massive $40 billion affordable housing tax credit to entice corporations to construct more homes as well as a $25,000 benefit to help first-time homeowners break into the market.
Economists are concerned that Harris' proposals are lacking in detail, and what is currently known about her tax credit for corporations and benefit for first-time homebuyers could boost demand too much and push home prices even higher than they are now. (Related: California Democrats pushing for bill to help ILLEGALS own homes in the state by covering down payments on home purchases.)
"We don't have tons of details," said Michael Strain, an economist at the American Enterprise Institute. "So much of [Harris' proposal] depends on how it is implemented."
Trump has pledged to lower interest rates and deport hundreds of thousands of illegal immigrants who are inflating housing demand. Research indicates that around a third of the more than 6.3 million households with undocumented migrants in them do not live with either American citizens or lawful immigrant residents, and thus could be subject to expulsion. If Trump's plan is fulfilled, it could see the market cool enough to allow many homebuyers to purchase homes both at substantially lower prices and lower rates.
However, economists have warned that deporting migrants will most likely cut into the workforce of the construction industry and limit new housing supply, given that around 25 percent of construction workers in the U.S. are foreign-born.
Economists have noted that some of the proposals from Harris and Trump are merely bandaid solutions to decades of housing market policy mismanagement, and they believe there are no quick fixes for an affordable housing shortfall that has been getting worse since the Great Recession 15 years ago.
Watch this clip from Fox Business discussing how one of the top criticisms of Americans during this Democratic administration is the housing affordability crisis.
This video is from the NewsClips channel on Brighteon.com.
More related stories:
Montana's pandemic-driven real estate boom causes sudden increase in property taxes.
Florida home prices stagnate as housing supply surges.
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