What’s the Impact?
With the Presidential election just around the corner, it’s normal for people to be curious about the future. When uncertainty begins to creep in, it can trigger a whole roller coaster of emotions, especially if you’ve been considering buying or selling a property this year. You’re likely wondering what impact the election could have on the housing market and whether it’s still the right time to make your move.
But here’s something that might surprise you: the influence of Presidential elections on the housing market has historically been minor and short-lived. Your concerns are valid and worth addressing so that you can confidently proceed with your plans.
Let’s dive into decades of data to show you what has happened to home sales, prices, and mortgage rates during past Presidential election cycles. This will help you make an informed decision about your property ownership plans.
When it comes to home sales, there’s a small dip in the month leading up to the Presidential election (from October to November). Some buyers prefer to hold off on making their decision. However, it’s key to remember that this slow-down is fairly insignificant and brief.
The Data
Data from the Department of Housing and Urban Development (HUD) and the National Association of Realtors (NAR) suggest that home sales have increased the year following 9 of the last 11 Presidential elections. This trend has been consistent since the early 1990s.
Now, what about the prices? Do they fall during election years? Usually not. As noted by residential appraiser and housing analyst, Ryan Lundquist:
“An election year doesn’t change the existing trend of the market.”
Home prices have a history of rising steadily, irrespective of any elections. So, going by historic trends, one can expect the current price trend in the local markets to continue, barring any major market or economic changes.
NAR’s latest data reveals that home prices increased the year after 7 of the last 8 Presidential elections.
The exception was the period from 2008 to 2009, which coincided with the housing market crash – certainly an atypical year. Today’s market is much more robust and even though prices are stabilizing nationally, there’s no overall decline.
Another crucial aspect is mortgage rates, which affect your monthly home finance payments. Data from Freddie Mac indicates that mortgage rates declined from July to November in 8 of the last 11 Presidential election years.
This trend already appears to be manifesting this year, with most experts predicting a slight easing of mortgage rates for the rest of 2024. If this trend continues – and all current indicators suggest it will – your purchase power could see a significant boost if you’re planning to buy a home in the coming months.
So, what’s the main takeaway? Although Presidential elections do have some degree of influence on the housing market, their effects are usually minimal. As Lisa Sturtevant, Chief Economist at Bright MLS, points out:
“Typically, the housing market doesn’t look very different in presidential election years compared to other years.”
In other words, for most home buyers and sellers, elections don’t notably affect their plans.
Another crucial aspect is mortgage rates, which affect your monthly home finance payments. Data from Freddie Mac indicates that mortgage rates declined from July to November in 8 of the last 11 Presidential election years.
This trend already appears to be manifesting this year, with most experts predicting a slight easing of mortgage rates for the rest of 2024. If this trend continues – and all current indicators suggest it will – your purchase power could see a significant boost if you’re planning to buy a home in the coming months.
So, what’s the main takeaway? Although Presidential elections do have some degree of influence on the housing market, their effects are usually minimal. As Lisa Sturtevant, Chief Economist at Bright MLS, points out:
“Typically, the housing market doesn’t look very different in presidential election years compared to other years.”
In other words, for most home buyers and sellers, elections don’t notably affect their plans.
