General Real Estate News June 17, 2024

Do Elections Impact the Housing Market?

The 2024 Presidential election is just months away. As someone considering buying or selling a home, you may wonder how elections affect the housing market.

Historically, Presidential elections have only a small, temporary impact on the housing market. Here’s what’s happened to home sales, prices, and mortgage rates during those periods.

Home Sales

During November in Presidential election years, home sales typically slow down slightly. 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 is mainly because people feel uncertain about making big decisions during such a pivotal time. However, this slowdown is temporary. 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 next year.

Home Prices

Do home prices drop during election years? Not typically. Residential appraiser and housing analyst Ryan Lundquist states:

“An election year doesn’t alter the price trend that is already happening in the market.”

Home prices are resilient, generally rising year-over-year, regardless of elections. 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.

Mortgage Rates

Mortgage rates, which affect your monthly payment when buying a home, tend to decrease from July to November in most election years. Data from Freddie Mac shows this trend in eight of the last 11 Presidential election years.

Most forecasts expect mortgage rates to ease slightly throughout the rest of the year. This trend could benefit those looking to buy a home, as lower rates mean lower monthly payments.

What This Means for You

While Presidential elections do have some impact on the housing market, the effects are usually small and temporary. 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 significantly impact their plans.

Bottom Line

While it’s natural to feel uncertain during an election year, history shows the housing market remains strong and resilient. If you have questions, reach out to a local real estate agent. They’re here to help you navigate the market, election year or not.