New home sales spiked following the November election, according to a report from housing market advisory firm Zonda.
In the report, 10% of builders said consumers were re-entering the market following the presidential election.
Presidential elections historically don’t have a dramatic or long-lasting impact on the housing market, but this time was different, the firm says.
The combination of the election, anticipated future rate cuts, mortgage rate volatility, and housing affordability challenges resulted in more consumers stepping to the sidelines than usual.
But once the election passed, consumers began to reengage.
As per the firm’s data, new home sales in November hit the highest level in seven months, reaching a seasonally adjusted annualized rate of 740,636.
Incentives also heavily drove new home sales in November, according to the report.
November sales activity was 15.7% higher than last year and 17.0% above 2019 levels, the firm says.
“There’s no denying that incentives helped drive new home sales in November, especially for larger builders,” says Ali Wolf, chief economist at Zonda. “Our data captured that 75 percent of all new home projects were offering some kind of incentive on quick move-in supply. The important difference seen in November, though, was a lift in consumer confidence. The election was over – it was time to move on.”
Photo: Alexander Andrews