When the buzz of a Presidential election fills the air, it’s natural to wonder how it might ripple through the housing market. The good news? Historically, these political events have only a small and temporary effect on real estate. So, if you’re contemplating buying or selling a home, you might not need to hit the pause button just yet. Let’s delve into the data to clear up any uncertainties, empowering you with the facts you need to make informed decisions.
Home Sales: A Temporary Slowdown
As Presidential elections approach, there’s often a slight dip in home sales, typically from October to November. This is mainly due to consumer hesitation as they wait for electoral outcomes before making big financial decisions.
However, this slowdown is more like a brief intermission rather than a significant pause. Historical data from the Department of Housing and Urban Development (HUD) and the National Association of Realtors (NAR) shows that after 9 of the last 11 elections, home sales didn’t just recover—they increased the following year. This trend has been consistent since the early 1990s, signaling a resilient market that’s quick to bounce back.
Home Prices: Steady As She Goes
When it comes to home prices, the trend is generally upward, regardless of who’s vying for the Oval Office. Over the past several election cycles, home prices have continued to rise in 7 of the last 8 elections, according to NAR. The exception? The 2008 election, when the housing crisis led to a dip in prices.
But today’s market stands on much firmer ground. While we’re seeing some moderation in price increases nationally, an overall decline is not on the horizon. So, if you’re eyeing a property, rest assured that your investment is likely to grow over time.
Mortgage Rates: A Sigh of Relief
Mortgage rates tend to capture a lot of attention during election years, given their direct impact on monthly payments. Historically, data from Freddie Mac shows that in 8 of the last 11 election cycles, mortgage rates decreased from July to November.
The current trend suggests we might see this pattern repeat in 2024, which is promising news for those looking to buy. Lower rates can enhance your purchasing power, making it a potentially opportune time to secure a mortgage.
Don’t Hit Pause on Your Plans
While the electoral process might bring a flurry of uncertainty, it doesn’t necessitate a halt in your homeownership journey. The historical data provides a comforting narrative: Presidential elections have a fleeting impact on the housing market, and the rebound often follows swiftly. So, whether you’re ready to buy or sell, the election cycle should be just another factor in your decision-making process, not the defining one.
What’s the big takeaway? While Presidential elections do have some impact on the housing market, the effects are usually minimal. As Lisa Sturtevant, Chief Economist at Bright MLS, says:
“Historically, the housing market doesn’t tend to look very different in presidential election years compared to other years.”
By focusing on what history tells us, you can stride confidently into the housing market, equipped with the knowledge that while elections may shift the sands temporarily, the foundation remains robust. Your homeownership dreams don’t have to wait.