See photos and updates from listings directly in your feed
Share your favorite listings with friends and family
Save your search and get new listings directly in your mailbox before everybody else
The Impact of US Presidential Elections on the Housing Market
As the 2024 US Presidential election approaches, many prospective homebuyers and sellers are understandably concerned about how this major political event might influence the housing market. While elections generate considerable attention and speculation, historical data reveals that their impact on the housing market is often temporary and minor. Here’s an in-depth look at how past presidential elections have affected home sales, prices, and mortgage rates, helping you make informed decisions in the coming months.
Home Sales
Historically, home sales experience a slight slowdown during presidential election years, particularly in November. This trend can be attributed to the uncertainty and hesitation often accompanying election periods. Potential buyers and sellers might delay their decisions until after the election, leading to a temporary dip in market activity. Ali Wolf, Chief Economist at Zonda, notes that:
“Home sales are usually unchanged compared to a non-election year, with the exception of November. In an election year, November is slower than normal.”
However, this slowdown is typically short-lived. Data from the Department of Housing and Urban Development (HUD) and the National Association of Realtors (NAR) shows that home sales increased in nine of the last eleven presidential elections in the year following the election. This rebound reflects a return to normalcy as political uncertainties settle and market confidence is restored.
Home Prices
Contrary to what some might fear, presidential elections do not generally cause home prices to decline. Instead, home prices tend to follow existing market trends, regardless of the election cycle. Ryan Lundquist, a residential appraiser and housing analyst, explains:
“An election year doesn’t alter the price trend already happening in the market.”
Data from the NAR reveals that home prices increased the following year after seven of the last eight presidential elections. The only exception occurred during the housing market crash, an extraordinary event unrelated to the election. Thus, home prices have shown resilience, continuing to rise year-over-year despite the political climate.
Mortgage Rates
Mortgage rates play a crucial role in the housing market, directly affecting monthly payments for homebuyers. Data analysis from Freddie Mac over the last eleven presidential elections indicates that mortgage rates have decreased from July to November in eight of those years. This trend suggests that election years bring favorable conditions for homebuyers, potentially leading to lower borrowing costs.
Most forecasts suggest that mortgage rates will ease slightly throughout the remainder of the election year. If these predictions hold, the current year could follow the historical pattern, offering a slight advantage to those looking to secure a mortgage.
What This Means for You
The overarching theme from historical data is that while presidential elections can introduce temporary fluctuations in the housing market, these effects are typically minor and short-lived. Lisa Sturtevant, Chief Economist at Bright MLS, summarizes this perspective:
“Historically, the housing market doesn’t tend to look very different in presidential election years compared to other years.”
The key takeaway for both buyers and sellers is that the housing market remains strong and resilient, even during election years. If you are considering buying or selling a home, it is essential to focus on your personal circumstances and market conditions rather than potential political changes.
Key Point Summary
While it’s natural to feel uncertain during an election year, history shows that the housing market continues to thrive regardless of the political landscape. If you need guidance navigating the market during this period, seeking advice from experienced real estate professionals can provide valuable insights and help you make well-informed decisions.
For personalized assistance in buying or selling property, particularly in dynamic markets like the Bay Area, connecting with experts can ensure you’re making the best moves, election year or not.
