What the Upcoming Presidential Election Means for the Housing Market

As we approach the next Presidential election, it’s natural to wonder how it might impact various aspects of our lives, including the housing market. Questions and uncertainties can easily arise, and if you’ve been considering buying or selling a home this year, you might be curious about whether it’s still a good time to make your move.

Here's some reassuring news: historically, Presidential elections have only had a minor, temporary effect on the housing market. Let’s dive into decades of data to see what typically happens to home sales, prices, and mortgage rates during election cycles, so you can make informed decisions without unnecessary hesitation.

1. Home Sales: A Brief Pause, Then a Rebound

In the month leading up to a Presidential election, from October to November, there’s typically a slight slowdown in home sales. Some buyers and sellers decide to wait it out until after the election before making any big decisions. However, it’s important to note that this slowdown is generally small and short-lived.

In fact, after 9 of the last 11 Presidential elections, home sales increased in the year following the election, according to data from the Department of Housing and Urban Development (HUD) and the National Association of Realtors (NAR). This pattern has been consistent since the early 1990s. So, while there might be a temporary dip in activity, the housing market usually picks up right where it left off—and sometimes even stronger.

2. Home Prices: Staying on Course

Another common question is whether home prices tend to drop during election years. The answer? Not usually. As residential appraiser and housing analyst Ryan Lundquist puts it, “An election year doesn’t alter the price trend that is already happening in the market.”

Generally, home prices continue to rise over time, regardless of the election cycle. The latest data from NAR shows that after 7 of the last 8 Presidential elections, home prices increased the following year. The only exception was from 2008 to 2009, during the height of the housing market crash, which was an extraordinary situation. In today’s more resilient market, while price growth may be moderating, it doesn’t mean a decline is on the horizon.

3. Mortgage Rates: A Potential Boost for Buyers

Lastly, let’s talk about mortgage rates. These rates play a significant role in determining your monthly mortgage payment if you’re financing a home. Looking back at the last 11 Presidential election years, data from Freddie Mac shows that mortgage rates decreased from July to November in 8 of them.

This year, we’ve already seen mortgage rates trending downward, and most experts forecast they’ll ease slightly throughout the rest of 2024. If this trend continues, it could mean lower rates for homebuyers, enhancing your purchasing power and making homeownership more affordable.

What Does This Mean for You?

The big takeaway is that while Presidential elections can have some impact on the housing market, the effects are usually minimal. As Lisa Sturtevant, Chief Economist at Bright MLS, 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 have a major impact on their plans.

Bottom Line

While it’s completely normal to feel a bit uncertain during an election year, the historical data shows that the housing market remains strong and resilient. So, if you’ve been considering buying or selling a home, there’s no need to pause your plans. Let’s connect and navigate the market together during this election cycle—you’ve got this!