The 2024 Presidential election is just months away. As someone considering buying or selling a home, you're likely curious about how elections might impact the housing market.
It's a great question because buying or selling a home is a major decision, and it's natural to wonder how such a significant event might influence your plans.
Historically, Presidential elections have had a small, temporary impact on the housing market. Here’s the latest on what’s happened to home sales, prices, and mortgage rates during election periods.
Home Sales
During the month of November in election years, there’s typically a slight slowdown in home sales. As Ali Wolf, Chief Economist at Zonda, explains:
“Usually, home sales are unchanged compared to a non-election year with the exception being November. In an election year, November is slower than normal.”
This slowdown is mostly due to some people feeling uncertain and hesitant about making big decisions during such a pivotal time. However, this is a temporary effect. Historically, home sales bounce back in December and continue to rise the following year.
Data from the Department of Housing and Urban Development (HUD) and the National Association of Realtors (NAR) shows that after nine of the last 11 Presidential elections, home sales increased the following year:
Home Prices
What about home prices? Do they drop during election years? Not typically. As residential appraiser and housing analyst Ryan Lundquist puts it:
“An election year doesn’t alter the price trend that is already happening in the market.”
Home prices are resilient and generally rise year-over-year, regardless of elections. The latest data from NAR shows that after seven of the last eight Presidential elections, home prices increased the following year:
The only year when prices declined after an election was during the housing market crash, which was far from typical. Today's market is different from back then, and home prices continue to trend upward.
Mortgage Rates
Mortgage rates are crucial because they affect your monthly payment when buying a home. Looking at the last 11 Presidential election years, data from Freddie Mac shows mortgage rates decreased from July to November in eight of them:
Most forecasts expect mortgage rates to ease slightly throughout the remainder of the year. If these predictions hold true, this year will follow the trend of declining rates leading up to most previous elections. For potential buyers, lower rates could mean a lower monthly payment.
What This Means for You
So, what’s the big takeaway? While Presidential elections do have some impact on the housing market, the effects are usually small and temporary. As Lisa Sturtevant, Chief Economist at Bright MLS, says:
“Historically, the housing market doesn’t tend to look very different in presidential election years compared to other years.”
For most buyers and sellers, elections don’t have a major impact on their plans.
Closing Thoughts
While it’s natural to feel uncertain during an election year, history shows the housing market remains strong and resilient. For help navigating the market, election year or not, let’s connect.
