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With the 2024 US Presidential election coming up, many people looking to buy or sell homes wonder how this event might impact the housing market. While elections can cause a lot of buzz and speculation, history shows that their effect on the housing market is usually small and temporary. Here’s a look at how past presidential elections have influenced home sales, prices, and mortgage rates, which might help you make better decisions in the months ahead.
Home Sales
During presidential election years, home sales often slow down a bit, especially in November. This slowdown happens because people may feel uncertain and hesitant, choosing to wait until after the election to make decisions. Ali Wolf, Chief Economist at Zonda, explains that:
“Home sales usually stay about the same as in non-election years, except for November, which tends to be slower during an election year.”
But this slowdown doesn’t last long.
Data from the Department of Housing and Urban Development (HUD) and the National Association of Realtors (NAR) shows that home sales actually increased in nine of the last eleven presidential elections during the year following the election. This rebound suggests that the market quickly returns to normal once the election ends and political uncertainties fade.
Home Prices
Contrary to some fears, presidential elections don’t usually cause home prices to drop. Instead, home prices tend to follow the trends already in place, regardless of the election.
According to NAR data, home prices increased in the year after seven of the last eight presidential elections. The only exception was during the housing market crash, which wasn’t related to the election. This shows that home prices keep rising year after year, even during election times.
Mortgage Rates
Freddie Mac’s data from the last eleven presidential elections shows that mortgage rates decreased from July to November in eight of those years. This pattern suggests that election years can create good conditions for homebuyers, lowering borrowing costs.
Most predictions say that mortgage rates might drop slightly during the rest of this election year. If this happens, it could make it easier for people to get a mortgage and buy a home. In fact, we have been experiencing a drop in mortgage rates, dropping an average of .5% over the last 30 days (according to Mortgage News Daily).
What This Means for You
Overall, historical data shows that while presidential elections can cause some temporary changes in the housing market, these effects are usually small and short-lived. Lisa Sturtevant, Chief Economist at Bright MLS, sums it up by saying:
“Historically, the housing market doesn’t look very different in presidential election years compared to other years.”
The main point for buyers and sellers is that the housing market tends to follow the trajectory that it has been on, even during election years. If you’re thinking about buying or selling a home, it’s important to focus on your own situation and the current market conditions rather than worrying too much about political changes.
Summary
While it’s normal to feel uncertain during an election year, history shows that the housing market performs independently of what’s happening politically. If you need help navigating the market during this time, getting advice from experienced real estate professionals can be very helpful.
