Election years typically introduce uncertainty into the real estate market, slowing sales activity — but not this year, a new study suggests.
The desire for homeownership is on the rise, and half of Americans say that the economic and political climate would make them more likely to purchase a home in 2020 if they were in the market; only 29% said it would make them less likely, according to a Nerdwallet survey of over 2,000 Americans released Tuesday.
“I don’t quite buy it [past patterns of slow elections years] applying for this year. Here’s why: the economy is doing well, unemployment is low and so are mortgage rates… So people aren’t going to wait for election results. People will buy, if they can afford to,” said Holden Lewis, Nerdwallet home and mortgage expert.
More than a quarter of respondents said they would reconsider a home purchase if their chosen political candidate lost the election, but experts called this an “emotionally-driven” statistic, unlikely to actually impact homebuying decisions.
“When people are polled during an election year, you wonder if they are actually honest. As politically-driven as some folks are, if somebody needs to buy, they’re going to buy regardless of who is president,” said Michael Romer, co-founder and managing partner of New York City-based law firm, Romer Debbas LLP. But he did note that administration changes could impact taxes and regulations for real estate investors.
Buying is now a priority
The study also found that 84% of Americans say buying a home is a priority to them, up from 75% in 2018. But high demand and low mortgage rates have left few affordable homes for sale on the market. About 2 million homes sold to first-time homebuyers in 2019, according to the study. That sales pace would have to more than double to meet the demand of more than 30 million Americans who plan to purchase their first home in the next five years.
“Going into this year, we have homebuyers who are optimistic about going into the market, driven by a strong economy and a surge in people reaching first-time homebuying age in their early to mid-30s. And on the other hand, there are challenges with affordability and inventory,” said Lewis.
Sarah Paynter is a reporter at Yahoo Finance. Follow her on Twitter @sarahapaynter
More from Sarah: