How Presidential Elections Influence the Housing Market: What You Need to Know
As the next Presidential election approaches, you might be wondering how it could impact your plans to buy or sell a home. With all the uncertainty swirling around, it’s easy to feel uneasy about making a move. But here’s a silver lining: historically, Presidential elections have only had a minor, temporary effect on the housing market. Let's dive into how elections have influenced home sales, prices, and mortgage rates in the past, so you can make informed decisions about your real estate plans.
The Effect of Presidential Elections on Home Sales
Do Elections Cause a Drop in Home Sales?
It’s common to see a slight dip in home sales during the months leading up to a Presidential election, from October to November. Why does this happen? Some buyers and sellers hit the pause button, unsure about the future. But don't worry—this slowdown is usually short-lived.
Historical Trends in Home Sales
How Presidential Elections Affect Home Prices
Do Prices Drop During Election Years?
When it comes to home prices, Presidential elections don’t typically cause a significant drop. Residential appraiser and housing analyst Ryan Lundquist points out that an election year doesn’t usually disrupt the existing price trend. Home prices generally continue to rise over time, regardless of election cycles.
Long-Term Price Trends
Data from NAR supports this view. After 7 of the last 8 Presidential elections, home prices increased the following year. The only exception was during the 2008-2009 financial crisis, a period that was anything but typical. Today’s market is more resilient, with prices moderating rather than declining. So, if you’re concerned about waiting for a price dip due to the election, historical trends suggest it’s unlikely.
Mortgage Rates and Presidential Elections
What Happens to Mortgage Rates?
Mortgage rates are another key factor to consider. Historical data from Freddie Mac shows that mortgage rates have often decreased from July to November during election years. In fact, in 8 out of the last 11 Presidential elections, rates have dropped during this period.
Current Trends and Forecasts
This year is following a similar pattern, with mortgage rates starting to ease. Most experts anticipate a slight decline in rates throughout the rest of 2024. This trend could be a boon for homebuyers, enhancing your purchasing power and potentially making it a good time to buy.
What This Means for Your Home Buying or Selling Plans
Should You Wait or Act Now?
The bottom line is that while Presidential elections do have some impact on the housing market, the effects are usually minimal. As Lisa Sturtevant, Chief Economist at Bright MLS, notes, the housing market typically doesn’t look drastically different in election years compared to other years.
For most buyers and sellers, the election's influence on the market shouldn’t be a major deterrent. Historical data shows that the market remains strong and resilient, and you don’t need to put your plans on hold because of the election.
Final Thoughts: Moving Forward with Confidence
It’s natural to feel some uncertainty during an election year, but history shows that the housing market tends to stay steady. If you’re considering buying or selling a home, the key is to focus on your personal goals and the current market conditions rather than getting caught up in election-related concerns.
Ready to Make a Move?
If you’re feeling unsure about how to proceed, connecting with a knowledgeable real estate professional can provide clarity and guidance. Let’s discuss your plans and how you can navigate the market effectively during this election cycle.
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