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Are You Waiting To Buy a Home Until After The Election? Here’s Why That’s Probably Not The Best Idea

Historically, the end of September through the beginning of October is the best time to buy a home.  That’s when the heat of the summer market cools down and right before the busy holiday season when inventory slows down. This year should be even better - if you haven’t heard, mortgage rates are the lowest in years.  As I write this, they are currently sitting at 5.5% for a 30-year FHA mortgage. Listing prices are also lower than they’ve been in a while. The trouble is that loan applications and pending home sales are also lower than usual.  Why? Housing Wire reports that as many as 40% of home buyers want to wait until after the election before they get serious about buying a home. Let’s look at why that is not the best home-buying strategy.

Election Uncertainty and the Housing Market

Sure, you may be stressed over this election – there’s a lot at stake! Yes, election years do tend to bring some uncertainty to the housing market, and home buyers and sellers may hesitate to make a huge financial decision, such as buying a home. However, the housing market is not solely driven by political events, and historically, the housing market has remained strong during election years.

According to the National Association of Realtors, home sales increased by 4% in 2016 compared to the previous year, even though it was an election year. Home prices have increased during all but one of the last nine election years, with 2008 being the exception, and the market tanked during the subprime mortgage crisis. These positive trends show that the real estate market moves on even during political uncertainty.

Mortgage Rates Remain a Key Concern

Like I mentioned before, mortgage rates are lower than they’ve been in a while.  Last year at this time, mortgage rates were over 7%. Today, mortgage rates are between 5.5 and 6.2%, depending on the type of loan. That means your mortgage payment on a $300,000 home in New Mexico would be about $300 less if you bought it today versus last year!

After the election, it can be expected that the Federal Reserve will reevaluate the economy and act accordingly. That could mean that rates go back up, and you end up paying more for your home than you would have if you bought a home before the election.

Will Post-Election Conditions Be More Favorable For Home Buyers in New Mexico?

While some home buyers may be optimistic that the market will improve post-election, there are no guarantees. We don’t know for certain what mortgage rates will be or what the New Mexico real estate market will be like. Another reason we’ve heard of some home buyers pausing their home search is because one of the candidates has promised to implement first-time home buyer incentives, but again, we don’t know if or when that will actually happen.

At the end of the day, we always recommend that if you are in the financial position to buy a home today and find a home you like, do it! Waiting for conditions to become more favorable is a huge risk and could end up costing you time and money – something many homebuyers regret.  If you’re in New Mexico – give us a call! We will help you through the home-buying process, and if we hurry, we can get you settled into a new home just in time to watch those election results roll in.

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