A new study from Redfin reveals that one-third of U.S. homebuyers consider state politics when choosing where to live, according to real estate agents.
Redfin Chief Economist Darryl Fairweather joins Yahoo Finance Live to analyze survey data and how this trend could impact the housing sector in some states.
Fairweather notes that homebuyers are “increasingly polarized” and real estate agents need to take that into account when talking to customers. Fairweather explains that many homebuyers who move to another state for reasons such as cost of living experience a “trade-off” when they learn about the political climate in their new region.
Given the shift in work culture post-pandemic, Fairweather believes location is “less important” and less of a factor in determining where people move.
For more expert insights and the latest market trends, click here to watch the full episode of Yahoo Finance Live.
Editor's note: This article was written by Ike Ntekim
video transcript
– Homebuyers are increasingly considering politics when deciding where to move, according to a new study released by Redfin. But today, with mortgage rates slowly rising, the dream of buying a home understandably remains elusive for many Americans. To learn more about this research and the housing market in 2024, we spoke with Redfin Chief Economist Darryl Fairweather.
Darryl, thank you so much for joining us on the show. I have to say I wasn't too surprised by the research and research you guys did. Because in my own life, I have friends who moved to Texas and Florida. I'm not saying Darryl's politics were the reason, but it was certainly a factor. But apparently they're not alone. Do you think this is a kind of trend?
Daryl Fairweather: Yes, when we surveyed real estate agents, one-third of them said they had worked with a client who moved due to politics in the last year. This is an increase from the last time we conducted the survey. So this shows that people are becoming more polarized, and real estate agents are less prepared to have conversations about what the political climate is like in the cities and metropolitan areas that people are moving to. It is increasingly becoming the case that it is necessary to
– How important is this, as one-third of real estate agents surveyed said at least one client, and likely many, were relocating for political reasons? I have to say that I was trying to figure out exactly what. And I'm not sure you can distinguish between political reasons and tax reasons. Tax reasons are taken into account by many people when making home purchase and location decisions. In other words, things seem a bit vague here.
Daryl Fairweather: You're right, politics can mean all sorts of things. Anecdotally, I hear that people initially moved for economic reasons. They were looking for affordability when they left places like California and moved to states like Texas and Florida. But once I got there, I realized there were other trade-offs related to the political climate and laws passed in recent years.
So I think that sometimes politics coincides with economics, and sometimes it doesn't.
– Darryl, I also wonder how much of the big trends we've seen hold true, which is more people being able to work from home, giving more flexibility to more Americans. I am. You can have it if you so choose. Perhaps you'll have more flexibility to move into areas that align with your own personal politics.
Daryl Fairweather: yes. Remote work allows people to travel for a variety of reasons. In the past, my current job was my primary reason for moving. But people now have other things in mind, and location is less important, especially for those who have the option of working remotely.
– I haven't had a chance to check mortgage interest rates for a while, so I'd like to talk a little bit about them. Hey, they don't come down much, Daryl? So this level is still around 7%, or close to 7%, but is it enough to address the weaknesses we've seen so far?
Daryl Fairweather: It looks like it's making a dent. The rate of decline has slowed by comparison, which has boosted demand in recent weeks. Our data shows that home prices are higher than expected, and sales are growing even more in regions like California, which have been hit by high interest rates because home prices are so high.
So even this small interest rate move seems to be encouraging buyers, who are considering all factors such as the strength of the economy and job security, which motivates them to make big purchases.
– So, big question, Darryl. So, Mortgage News Daily says the 30-year fix here is 6.9% or 7%, but Darryl, do you think that's six months from now or 12 months from now?
Daryl Fairweather: I think it's probably down 200 to 300 basis points. But there will be more volatility. It bounces up and down. To bring inflation down significantly, we need some big news, something to show that we are indeed winning this battle against inflation. And, as we've heard many times from the Federal Reserve, they don't think the fight is over yet.
– Darryl, thank you so much for joining us. As always, we appreciate your time and insight.
Darryl Fairweather: Thank you.
