A new survey by Redfin reveals that according to real estate agents, one-third of American homebuyers are taking states' politics into consideration when choosing where to live.

Redfin Chief Economist Daryl Fairweather joins Yahoo Finance Live to break down the survey data and how this trend could impact the housing sector in some states.

Fairweather notes that homebuyers are "becoming more polarized," and real estate agents should start factoring that in when speaking to clients. Fairweather explains that many homebuyers who moved to other states due to factors such as cost of living, experience "trade-offs" upon discovery of their new community's political climate.

With changes in work culture post-pandemic, Fairweather sees job location as "less important" and is not as much of a driving factor for where people move.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Eyek Ntekim

Video Transcript

- New survey out by Redfin saying homebuyers are increasingly factoring in politics when deciding where to move. But with mortgage rates ticking up slowly today, the dream of buying a home continues to be, of course, a struggle for many Americans. For more on this survey and the housing market in 2024, we're talking to Redfin Chief Economist, Daryl Fairweather.

Daryl, thank you so much as always for joining the show. I got to say, some of this didn't really surprised me that the survey and study you guys all did. Because in my own life, I have a buddy who moved to Texas, and Florida, and I wouldn't say Daryl politics was the reason, but it was certainly a factor. But apparently, they're not alone. This is kind of a trend you're seeing?

DARYL FAIRWEATHER: Yes, we surveyed real estate agents, and a third of agents said that they were working with a client last year who was relocating due to politics. And this was up from the last time we did a survey. So, it just goes to show that people are becoming more polarized and it's becoming something that real estate agents need to be ready to talk about is, what is the political climate of the cities or metros that people are moving into?

- I have to say I was trying to figure out exactly how significant it was, because it's one third of real estate agents surveyed said, at least, one client, and presumably they have a lot of clients said that they were moving for political reasons. And I don't know if you can separate out political reasons from tax reasons, which a lot of people factor into their home buying and location decisions. In other words, it seems kind of murky here.

DARYL FAIRWEATHER: I think you're right, political can mean all sorts of things. Anecdotally, we've heard that people were at first moving for economic reasons. They were moving for affordability when they left places like California for states like Texas and Florida. But when they got there, they realized that there were other trade offs that they were making related to the political climate, the laws that have been passed in recent years.

So I think that sometimes politics aligns with economics, and sometimes it doesn't.

- Daryl, I also wonder how much of that could be the big trend we've seen of more people can now work from home, and that just gives a lot more Americans a lot more flexibility. If you so choose, you have that-- I guess, more flexibility now to move to an area better aligned with your own personal politics.

DARYL FAIRWEATHER: Yes. People have been able to move for all sorts of reasons because of remote work. It used to be that the job that you had was the first reason you would move. But now people are factoring in other things, whereas job location is less important, especially for people who have the option to work remotely.

- Let's just talk about mortgage rates for a minute because we haven't had a chance to check in with you in a little while about that. Man, they are not coming down much, are they Daryl? I mean, is this level still sort of around 7% or close to 7%, is that enough to make a dent here in the weakness that we've seen?

DARYL FAIRWEATHER: It seems to be making a dent. Compared to the fall rates have come down and that has boosted demand in recent weeks. We've seen that in our data, we've seen prices come in higher than we were expecting, we've seen more growth in sales in places like California that were hit hard by high rates because of how expensive homes are there.

So even this little movement in rates seems to be encouraging buyers, and buyers are considering all kinds of factors like the strength of the economy, their job security, and that is motivating them to make a big purchase.

- So here's my big question, Daryl. So Mortgage News Daily says the 30-year fixed here 6.9%, 7%, where do you think, Daryl, that is six months from now or 12 months from now?

DARYL FAIRWEATHER: I think that it will come down perhaps 200 300 basis points. But it's going to be a lot of volatility. It will bounce up and down. It will take some big news for it to come down substantially, something that shows that we really are winning this inflation fight. And as we've heard time and time again from the Federal Reserve, they don't see the fight as being over yet.

- Daryl, thank you so much for joining us. Always appreciate your time and insight.

DARYL FAIRWEATHER: Thank you.