The Impact of Presidential Elections on the Housing Market

The upcoming presidential election has many people wondering about the future and its potential impact on the housing market. If you're thinking about buying or selling, you’ve probably asked yourself if now is the right time is to do so.

The good news is that Presidential elections generally have a small, temporary effect on the housing market. Let's delve into the data from previous election cycles to see what typically happens to home sales, prices, and mortgage rates.

Home Sales

The month before a Presidential election (October to November) usually sees a slight dip in home sales (see graph below):

Some buyers adopt a "wait-and-see" approach, but this slowdown is minor and short-lived. Home sales historically rebound and continue to increase in the following year. Data from the Department of Housing and Urban Development (HUD) and the National Association of Realtors (NAR) show that after 9 of the last 11 elections, sales went up the year after, and this trend has been consistent since the early 1990s.

Home Prices

As housing analyst Ryan Lundquist puts it,

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

Home prices tend to appreciate over time, regardless of elections. Expect the current trend in your local market to continue unless there are unusual market or economic events. NAR data shows that following 7 of the last 8 Presidential elections, home prices rose the next year.

The exception was 2008-2009, during the housing market crash. Today's market is far more resilient. Although prices are moderating nationwide, they're not in an overall decline.

Mortgage Rates

Mortgage rates matter, especially if you're financing a home. In 8 of the last 11 elections, rates dropped from July to November, according to Freddie Mac data.

We're already seeing that trend this year, and experts predict further easing throughout 2024. This could boost your buying power if you're looking to purchase soon.

What This Means for You

The key takeaway? Presidential elections have some impact on the housing market, but the effects are usually minimal. As Bright MLS Chief Economist Lisa Sturtevant notes,

"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 alter their plans.

Bottom Line

It's normal to feel a bit uncertain during an election year, but history shows that the housing market remains strong and resilient. Don't let it put your plans on hold. If you need help navigating the market during this election cycle, let's connect.