It’s understandable if the upcoming Presidential election has you wondering what lies ahead, especially when it comes to your real estate decisions. Uncertainty can quickly lead to hesitation. If you’ve been thinking about buying or selling a home this year, you might be questioning how the election could affect the housing market—and whether now is still a good time to take action. Here’s some reassuring news: historically, Presidential elections have only had a slight, short-lived effect on the housing market. However, your concerns are valid, and it’s important to have answers before making any big decisions. Let’s explore what past election cycles have shown regarding home sales, prices, and mortgage rates. With this data in hand, you’ll be able to make a more informed choice as you consider your next steps in the housing market.
Home Sales
In the month leading up to a Presidential election, from October through November, there’s usually a slight dip in home sales, illustrated in the graph below.
Some buyers might choose to hold off on their purchase decisions during this period. However, it’s important to note that this slowdown is usually brief and minor.
Historically, home sales tend to rebound and continue rising in the year following a Presidential election.
Data from the Department of Housing and Urban Development (HUD) and the National Association of Realtors (NAR) reveals that after 9 of the last 11 Presidential elections, home sales increased the following year. This trend has been consistent since the early 1990s (see chart below):
Home Prices
You might also be questioning whether home prices decrease during election years. In general, they do not.
Home prices tend to rise over time, regardless of the election cycle. Based on historical trends, you can expect the current pricing trajectory in your local market to likely continue, unless affected by unusual market or economic conditions.
Recent data from the National Association of Realtors (NAR) shows that after 7 of the last 8 Presidential elections, home prices increased in the year following the election (see chart below):
The exception to this trend occurred from 2008 to 2009, during the peak of the housing market crash, which was an extraordinary situation. Today’s market is far more resilient. While national home prices are moderating, they are not experiencing an overall decline.
Mortgage Rates
Another important factor to consider is mortgage rates, as they directly affect your monthly payments if you’re financing a home. According to data from Freddie Mac, in 8 of the last 11 Presidential election years, mortgage rates decreased from July to November (see chart below):
We’ve already begun to see a similar trend this year, with mortgage rates starting to decrease. Most experts anticipate that mortgage rates will continue to ease slightly throughout the remainder of 2024. If this forecast holds true— and current indicators suggest it will—this year could follow the pattern of declining rates. For those looking to buy a home in the coming months, this could be excellent news for your purchasing power.
What this Means for You
What’s the main takeaway? Presidential elections do influence the housing market, but the impact is generally minor. For most buyers and sellers, elections don’t significantly alter their plans. Although it’s natural to feel uncertain during an election year, historical data shows that the housing market remains strong and resilient. This means you can confidently move forward with your plans without needing to pause.
*Images provided by Keeping Current Matters
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