With the 2024 Presidential election just months away, you might be wondering how this major event could influence your decision to buy or sell a home. It's a valid concern, given that purchasing or selling a property is a significant financial commitment.
Historical Impact of Elections on the Housing Market
Historically, Presidential elections have only had a small, temporary impact on the housing market. Here's a look at how home sales, prices, and mortgage rates have been affected during election years.
Home Sales
In election years, home sales typically experience a slight dip in November. As Ali Wolf, Chief Economist at Zonda, explains:
“Usually, home sales are unchanged compared to a non-election year with the exception being November. In an election year, November is slower than normal.”
This slowdown is mainly due to uncertainty and hesitation among buyers and sellers during a pivotal time. However, this trend is temporary. Data from the Department of Housing and Urban Development (HUD) and the National Association of Realtors (NAR) shows that after nine of the last 11 Presidential elections, home sales increased the following year.
Home Prices
What about home prices? Generally, they remain stable and tend to rise year-over-year, regardless of elections. Ryan Lundquist, a residential appraiser and housing analyst, notes:
“An election year doesn’t alter the price trend that is already happening in the market.”
According to NAR, after seven of the last eight Presidential elections, home prices went up the following year. The only exception was during the housing market crash, a unique event that doesn't reflect typical market conditions.
Mortgage Rates
Mortgage rates are crucial because they influence your monthly payments when buying a home. Data from Freddie Mac indicates that in eight of the last 11 Presidential election years, mortgage rates decreased from July to November. Most forecasts suggest a slight easing of mortgage rates for the remainder of this year, which could benefit prospective homebuyers with lower monthly payments.
What This Means for You
The key takeaway is that while Presidential elections do have some impact on the housing market, these effects are generally small and temporary. Lisa Sturtevant, Chief Economist at Bright MLS, states:
“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 significantly impact their real estate plans.
Bottom Line
While it's natural to feel some uncertainty during an election year, history shows the housing market's strength and resilience. If you're considering buying or selling a home, remember that the market typically remains robust. For guidance in navigating the market, election year or not, let's connect.
Comments