In the latest episode of the Power House podcast, HousingWire‘s Diego Sanchez sits down with Daren Blomquist, vice president of market economics at Auction.com. In this conversation, Blomquist explores the impact of the election on the housing market going into 2025. The duo also explore the lock-in effect and Auction.com’s expansion plans.
This conversation has been edited for length and clarity. To start, Sanchez and Blomquist discuss the election’s impact on key data lines in the housing market.
Blomquist: I do think there will be a so-called “Trump bump” at the end of the year, though seasonal changes may obscure some of those data lines. But now that we know what we’re dealing with, we’ll see a bump in some of those metrics. We’ll see mortgage rate volatility drop down. Buyers and sellers will come off the sidelines, resulting in more sales.
In terms of foreclosures, we’ll see distressed inventory come back into the market in early 2025. That is specifically tied to Trump and a less aggressive regulatory environment from the Consumer Financial Protection Bureau (CFPB). Servicers would be less fearful of foreclosing properties, especially those that have been distressed for a long time.
Also, others believe tariffs and immigration could potentially trigger an economic recession, but that would be further down the road into 2025.
Sanchez: Mass deportations and trade wars are potentially inflationary. What do you think about those aspects?
Blomquist: Trump wants mortgage rates to be low. However, even low rates are inflationary in nature. Tax cuts and driving lower rates will be the priority before we reach the trade war part of the agenda.
Sanchez: You’ve released interesting research and analysis on foreclosure and REO auctions, and it seems like that bidding activity foreshadows what may happen in the market next year. Could you unpack that research?
Blomquist: Folks that are buying at our distressed property auctions are primarily what we call local community developers — mostly real estate agents and investors. They’re buying these properties, renovating them and putting them back on the market as resales to owner occupants or rentals. When that bidding behavior grows, that’s probably a good sign for the retail market.
Sanchez: What is Auction.com’s bidding activity telling you about the spring housing market?
Blomquist: Unfortunately, it’s pointing to a sluggish spring housing market, though the election may be a factor in that. However, there are definitely some markets bucking that trend.
Sanchez: Are we still struggling through a mortgage rate lock-in effect? Are there other things suppressing inventory?
Blomquist: I absolutely think the lock-in effect is still in place. It’s interesting to contrast the new-homes market with the existing-homes market, and even the distressed-homes market. Homeowners in the distressed market are less emotionally tied to their homes, so they’re willing to cut prices. That causes activity to pick up.
To close the conversation, Blomquist explores Auction.com’s research initiatives that could impact the market next year.
Blomquist: We’re looking at the market up funnel from foreclosure and the pre-foreclosure market. That’s a really interesting market that’s been overlooked. We see agents trying to capture that inventory, and that may be somewhat predatory. Homeowners still need to sell. So, we’re hoping to see if there’s some disruption there.
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