What’s the Impact of Presidential Elections on the Housing Market?
It’s no surprise that the upcoming Presidential election may have you speculating about what’s ahead. And those unanswered thoughts can quickly spiral, triggering fear and unpredictability to swirl through your mind. So, if you’ve been thinking about purchasing or sellinga home this year, you’re probably curious about what the election may suggest for the real estate market— and if it’s still a good time to make your move.
Here’s fortunately that might shock you: generally, Presidential elections have just had a small, temporary effect on the real estate market. Your questions are absolutely worth answering, so you do not have to pause your plans in the meantime.
Here’s a look at years of information that shows exactly what’s taken place to home sales, costs, and home loan rates in previous Presidential election cycles, so you can progress with the truths as you weigh the pros and cons of your homeownership choice.
Home Sales
In the month leading up to a Presidential election, from October to November, there’s generally a slight downturn in home sales( see graph below):
Some consumers will merely wait it out before they make their purchase choice.Nevertheless, it’s essential to know this downturn is short-lived and little.
Historically, home sales bounce right back and continue to rise the following year.
Data from the Department of Housing and Urban Development( HUD) and the National Association of Realtors( NAR) reveals after 9 of the last 11 Presidential elections, home sales went up the year after the election, and it’s been occurring consistently because the early 1990s (see chart listed below):
Home Prices
You may also be wondering about home costs. Do rates come down during election years? Not usually. As domestic appraiser and real estate expert Ryan Lundquist notes:
” An election year does not change the price pattern that is currently taking place in the market.”
Home rates normally riseover time, despite an election cycle. So, based upon what history shows, you can anticipate the present pricing trend in your local market to likely continue, disallowing any unusual market or economic circumstances.
The current datafrom NAR reveals that after 7 of the last 8 Presidential elections, home costs increased the following year ( see chart below):
The one outlier was from 2008 to 2009, which was during the height of the real estate market crash. That was certainly not a typical year. Today’s market,however, is much more resilient. And while costs are moderatingnationally, they aren’t on a general decline.
Mortgage Rates
And the third thing that’s likely on your mind is home mortgage rates, because they impact your monthly payment if you’re funding a home. Looking at the last 11 Presidential election years, datafrom Freddie Macprograms home loan rates decreased from July to November in 8 of them ( see chart listed below):
And this year, we’ve currently begun to see that happen. Many specialists likewise forecast home mortgage rates will reduce slightly throughout the rest of 2024. If that occurs– and all indications today suggest it ought to– this year will continue to follow the trend of declining rates. If you’re looking to purchase a home in the coming months, this could be fantastic news for your purchasing power.
What This Means for You
What’s the huge takeaway? While Presidential elections do have some impact on the real estate market, the impacts are normally very little. As Lisa Sturtevant, Chief Economist at Bright MLS, states:
” Historically, the housing market does not tend to look very various in governmental election years compared to other years.”
For many purchasersand sellers, elections do not have a major impact on their strategies.
Bottom Line
While it’s natural to feel a bit unsure throughout an election year, history reveals the housing market remains strong and resilient. And this implies you do not have to pause your strategies in the meantime. For assistance navigating the market during this election cycle, let’s connect.
It’s no surprise that the upcoming Presidential election might have you speculating about what’s ahead. Do prices come down during election years?, considering that they impact your monthly payment if you’re financing a home. If that occurs– and all indications right now indicate it ought to– this year will continue to follow the trend of declining rates. While it’s natural to feel a bit unpredictable throughout an election year, history reveals the real estate market stays strong and durable.