The Impact of Presidential Elections on the Housing Market

As we approach the 2024 Presidential election, many potential home buyers and sellers may be wondering how this significant event could affect the housing market. It’s a valid concern—buying or selling a home is a major decision, and understanding the broader economic context is essential.

Historical Trends in Home Sales

Historically, Presidential elections have had only a minor, temporary impact on home sales. During November of election years, a slight slowdown in home sales is typical. Ali Wolf, Chief Economist at Zonda, notes, “Home sales usually remain steady compared to non-election years, except in November, which tends to be slower.”

This slowdown is often due to uncertainty and hesitation surrounding major decisions during an election cycle. However, it’s crucial to recognize that this dip is temporary; home sales typically rebound in December and continue to rise the following year. In fact, data from the Department of Housing and Urban Development (HUD) and the National Association of Realtors (NAR) indicates that after nine of the last eleven Presidential elections, home sales increased the following year.

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Understanding Home Prices

What about home prices? Generally, they do not drop during election years. Ryan Lundquist, a residential appraiser and housing analyst, emphasizes, “An election year doesn’t alter the price trend that is already happening in the market.” Home prices are resilient and tend to rise year-over-year, regardless of elections. According to NAR data, after seven of the last eight Presidential elections, home prices increased in the subsequent year.

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Mortgage Rates: What to Expect

Mortgage rates play a crucial role in determining your monthly payment when buying a home. Analyzing the last eleven Presidential election years, data from Freddie Mac reveals that mortgage rates decreased from July to November in eight of those years. Many forecasts suggest that mortgage rates may ease slightly as we move forward this year. If this trend continues, it could mean that more buyers, particularly first-time homebuyers, who are having difficulty qualifying for a mortgage at higher rates, can then enter the marketplace. This onslaught of new buyers leads to greater demand and a rise in home prices.

Key Takeaways

So, what does all this mean for you? While Presidential elections can influence the housing market, the effects are usually small and temporary. If you’re willing to act when others are hesitating, you’ll face less competition and keep more money in your pocket.

While it’s natural to feel uncertain during an election year, history shows that the housing market remains strong and resilient. If you have questions about our local market conditions, don’t hesitate to reach out. And if you’re sitting on the fence in analysis paralysis, get out of your head and take action!