The 2024 presidential election is just months away, and if you have been debating buying or selling your home, you’re probably curious about what effect elections have on the housing market. It’s a great question, because buying or selling a home is a major decision. You’ve likely seen the stock market fluctuate with current events and political elections. While you may guess that election years have a severe effect on housing prices, the opposite is often true. Historically, presidential elections have only had a small, temporary impact on the housing market.
So, let’s bust some myths about the housing market during election years. Here’s the latest on what’s happened to home sales, prices, and mortgage rates during past election years, and what it means for you.
Home Sales
In years when the presidential election takes place, there’s typically a slight slowdown in home sales during 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.”
There is a slight downturn in home sales during November, possibly due to a combination of buyers and sellers hesitant to begin a big project during a time of political change. However, it’s important to remember that this slowdown is temporary. Historically, home sales bounce back in December. In fact, data from the Department of Housing and Urban Development and the National Association of Realtors shows after nine of the last 11 presidential elections, home sales went up the next year:
The graph shows annual home sales going back to 1978. Each year, a presidential election is noted in blue. The year immediately after each election is green if existing home sales rose that year. The two orange bars represent the only years when home sales decreased after an election. What is notable about this graph is how little of a change some years had, showcasing how steady the housing market can be, even during election years.
Home Prices
What about home prices? If you have been betting on home prices to drop this year, think again. Home prices are pretty resilient; They generally rise year-over-year, regardless of elections. The latest data from NAR shows after seven of the last eight presidential elections, home prices increased the following year:
Just like the previous graph, this shows election years in blue. The only year when prices declined after an election is in orange, back in 2009. That was during the housing market crash, which was far from a typical year. So, if you’re worried about your home losing value because of an election, you can rest easy knowing prices often rise after most presidential elections.
Mortgage Rates
Mortgage rates are important because they affect how much your monthly payment will be when you buy a home. Data from Freddie Mac shows mortgage rates decreased from July to November in eight out of the last 11 elections.
If you are expecting a dramatic change in mortgage rates, the data shows just the opposite. Most forecasts expect rates to ease slightly throughout the remainder of the year. If they’re right, this year will follow the trend of declining rates leading up to most previous elections. And if you’re looking to buy a home in the coming months, this could be good news, as lower rates could mean a lower monthly payment.
What This Means for You
While presidential elections do have some impact on the housing market, the effects are usually small and temporary. For most buyers and sellers, elections don’t have a major impact on their plans. Rather than try to time the market, it’s better to buy or sell based on your timeline, because waiting can often cost you more in the end.
While it’s natural to feel a bit uncertain during an election year, history shows the housing market remains strong and resilient. For help navigating the market, election year or not, reach out to a Seven Gables agent today.
