What’s the Impact of Presidential Elections on the Housing Market?

<article class="post-1172173 post type-post status-publish format-standard has-post-thumbnail hentry" id="post-1172173"><span class="entry-date">August 27, 2024</span><div class="entry-header center-block text-center"><h1 class="entry-title">What's the Impact of Presidential Elections on the Housing Market?</h1><div class="shareBlock"><div class="shareTitle">Share</div><div class="shareIcons"><a aria-label="Twitter Share Link" class="twitter solid display-inline-block" data-tracking="Post,Social Post Link Clicked,Twitter" href="http://twitter.com/share?text=What%27s+the+Impact+of+Presidential+Elections+on+the+Housing+Market%3F&amp;url=https%3A%2F%2Fgilliggroup.com%2Fblog%2Fwhats-the-impact-of-presidential-elections-on-the-housing-market%2F" target="_blank"><span class="force-hidden">Twitter</span></a>
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</div></div><div class="post-tax post-category"><span></span><a href="../category/realtor-blog/index.html" rel="tag">Realtor Blog</a></div><div class="post-tax post-post_tag"></div></div><div class="entry-content"><div><img alt="What's the Impact of Presidential Elections on the Housing Market? Simplifying The Market" decoding="async" loading="lazy" src="https://media.agentaprd.com/sites/222/20240827-What-s-the-Impact-of-Presidential-Elections-on-the-Housing-Market-original.webp" style="display: block; margin-bottom: 5px; clear: both; max-width: 100%;" width=""/>
<p>It’s no surprise that the upcoming Presidential election might have you speculating about what’s ahead. And those unanswered thoughts can quickly spiral, causing fear and uncertainty to swirl through your mind. So, if you’ve been considering <a href="https://www.simplifyingthemarket.com/2024/07/18/unlocking-homebuyer-opportunities-in-2024/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">buying</a> or <a href="https://www.simplifyingthemarket.com/2024/08/05/what-every-homeowner-should-know-about-their-equity/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">selling</a> a home this year, you’re probably curious about what the election might mean for the <a href="https://www.simplifyingthemarket.com/2024/07/12/how-do-presidential-elections-impact-the-housing-market-infographic/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">housing market</a> – and if it’s still a good time to make your move.</p>
<p>Here’s the good news that may surprise you: <strong>typically, Presidential elections have only had a small, temporary impact on the housing market. </strong>But your questions are definitely worth answering, so you don’t have to pause your plans in the meantime.</p>
<p>Here’s a look at decades of data that shows exactly what’s happened to home sales, prices, and mortgage rates in previous Presidential election cycles, so you can move forward with the facts as you weigh the pros and cons of your homeownership decision.</p>
<h4><strong>Home Sales</strong></h4>
<p><span style="color: black;">In the month leading up to a Presidential election, from October to November, there’s typically a slight slowdown in </span><a href="https://researchwiseny.btig.com/ResearchLibraryAnalec/DownloadResearch.aspx?E=cafidk-b%E2%80%8B" rel="noopener noreferrer" style="color: black;" target="_blank">home sales</a><span style="color: black;"> </span><em style="color: black;">(see graph below):</em></p>
<p><span style="color: black;"><img decoding="async" src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240827/20240827-Slight-Seasonal-Drop-in-Sales-in-The-Month-Prior-To-a-Presidential-Election-original.png"/>Some consumers will simply wait it out before they make their purchase decision.</span><strong style="color: black;"> However, it’s important to know this slowdown is small and temporary.</strong></p>
<p><strong>Historically, home sales bounce right back and continue to rise the following year.</strong></p>
<p>In fact, data from the <a href="https://www.huduser.gov/periodicals/ushmc/fall08/hist_data.pdf" rel="noopener noreferrer" target="_blank"><em>Department of Housing and Urban Development</em></a> (HUD) and the <a href="https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales" rel="noopener noreferrer" target="_blank"><em>National Association of Realtors</em></a> (NAR) shows after 9 of the last 11 Presidential elections, home sales went up the year after the election, and it’s been happening consistently since the early 1990s (<em>see chart below</em>):</p>
<h4><strong><img decoding="async" src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240827/20240827-Home-Sales-Went-Up-After-9-of-the-Last-11-Presidential-Elections-original.png"/>Home Prices</strong></h4>
<p>You may also be wondering about <a href="https://www.simplifyingthemarket.com/2024/07/08/not-a-crash-3-graphs-that-show-how-todays-inventory-differs-from-2008/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">home prices</a>. Do prices come down during election years? Not typically. As residential appraiser and housing analyst Ryan Lundquist notes:</p>
<blockquote><p><em>“An election year doesn’t alter the price trend that is already happening in the market.”</em></p></blockquote>
<p>Home prices <a href="https://www.simplifyingthemarket.com/2024/03/13/your-home-is-a-powerful-investment/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">generally rise</a> over time, regardless of an election cycle. So, based on what history shows, you can expect the current pricing trend in your local market to likely continue, barring any unusual market or economic circumstances.</p>
<p>The latest <a href="https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales" rel="noopener noreferrer" target="_blank">data</a> from NAR reveals that after 7 of the last 8 Presidential elections, home prices increased the following year <em>(see chart below): </em></p>
<p><a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240826/20240827-Existing-Home-Prices-Went-Up-After-7-of-the-Last-8-Presidential-Elections-original.png" rel="noopener noreferrer" target="_blank"><img alt="No Caption Received" decoding="async" src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240826/20240827-Existing-Home-Prices-Went-Up-After-7-of-the-Last-8-Presidential-Elections-original.png"/></a>The one outlier was from 2008 to 2009, which was during the height of the housing market crash. That was certainly not a typical year. <a href="https://www.simplifyingthemarket.com/2024/08/02/3-reasons-why-were-not-headed-for-a-housing-crash/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">Today’s market,</a> however, is much more resilient. And while prices are <a href="https://www.simplifyingthemarket.com/2024/07/29/are-home-prices-going-to-come-down/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">moderating</a> nationally, they aren’t on an overall decline.</p>
<h4><strong>Mortgage Rates</strong></h4>
<p>And the third thing that’s likely on your mind is <a href="https://www.simplifyingthemarket.com/2024/08/19/how-mortgage-rate-changes-impact-your-homebuying-power/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">mortgage rates</a>, since they impact your monthly payment if you’re financing a home. Looking at the last 11 Presidential election years, <a href="https://www.freddiemac.com/pmms/archive" rel="noopener noreferrer" target="_blank">data</a> from <em>Freddie Mac</em> shows mortgage rates decreased from July to November in 8 of them <em>(see chart below): </em></p>
<p><a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240826/20240827-Mortgage-Rates-Decreased-Leading-Up-to-8-of-the-Last-11-Presidential-Elections-original.png" rel="noopener noreferrer" target="_blank"><img alt="No Caption Received" decoding="async" src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240826/20240827-Mortgage-Rates-Decreased-Leading-Up-to-8-of-the-Last-11-Presidential-Elections-original.png"/></a>And this year, we’ve already started to see <a href="https://www.simplifyingthemarket.com/2024/08/07/mortgage-rates-down-a-full-percent-from-recent-high/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">that happen</a>. Most experts also forecast mortgage rates will ease slightly throughout the rest of 2024. If that happens – and all signs right now indicate it should – this year will continue to follow the trend of declining rates. So, if you’re looking to buy a home in the coming months, this could be great news for your purchasing power.</p>
<h4><strong>What This Means for You</strong></h4>
<p>What’s the big takeaway? <strong>While Presidential elections do have some impact on the housing market, the effects are usually minimal. </strong>As Lisa Sturtevant, Chief Economist at <em>Bright MLS</em>, says:</p>
<blockquote><p><em>“Historically, the housing market doesn’t tend to look very different in presidential election years compared to other years.”</em></p></blockquote>
<p>For most <a href="https://www.simplifyingthemarket.com/2024/08/15/what-credit-score-do-you-really-need-to-buy-a-house/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">buyers</a> and <a href="https://www.simplifyingthemarket.com/2024/07/30/the-biggest-mistakes-sellers-are-making-right-now/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">sellers</a>, elections don’t have a major impact on their plans.</p>
<h3>Bottom Line</h3>
<p>While it’s natural to feel a bit uncertain during an election year, history shows the housing market remains strong and resilient. And this means you don’t have to pause your plans in the meantime. For help navigating the market during this election cycle, reach out to a local real estate agent. </p>
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