Election Year Housing Market: What You Really Need to Know

No matter how many elections you’ve witnessed, every November feels like it’s full of surprises. The big question looms: should you make a move in the housing market, or should you hold off until the election dust settles?

Historically, presidential elections have only a minor and temporary impact on the housing market. Still, it’s natural to wonder how this year’s election might influence your decision to buy or sell a home. Here’s a quick overview of what to expect, based on patterns from past election years.

How Do Elections Affect the Housing Market?

Home Sales

During election years, November usually sees a slight dip in U.S. home sales. According to Ali Wolf, Chief Economist at Zonda, this slowdown isn’t drastic, but it’s noticeable. The reason? Uncertainty. People tend to hesitate when making big decisions, like buying or selling a home, if they believe the election could impact their finances or lifestyle choices.

But here’s the good news: this dip is temporary. Home sales typically bounce back in December and continue to rise in the following year. In fact, data from the U.S. 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 next year.

**Home Prices**

When it comes to home prices, the story gets interesting. According to Bankrate, home price appreciation has often outpaced that of non-election years. A detailed analysis of Case-Shiller data reveals that since 1987, home prices have risen an average of 4.84% during election years, compared to 4.44% during non-election years.

On the surface, this might make it seem like election years are a boon for the housing market. But the reality is more nuanced. Let’s break it down with some historical data:

- 2008: The housing market plummeted, with home values dropping by 12%. This wasn’t due to election jitters but rather the bursting of the housing bubble and a collapsing global economy.
- 2021: The best year for home price growth since 1987, with values soaring 18.9% during the pandemic housing boom. Again, this had little to do with the election and everything to do with extraordinary economic conditions.

Mortgage Rates

Mortgage rates are a crucial factor because they determine your monthly payments when buying a home. So, what happens to mortgage rates during an election year? According to Freddie Mac, in eight of the last 11 presidential elections, mortgage rates declined from July to November.

Looking ahead to the aftermath of this year’s election, most housing market forecasts suggest a slight easing of mortgage rates through the end of 2024 and into 2025. If these predictions hold, we could see a continuation of the trend where interest rates dip before the election and keep falling afterward.

Lower rates mean lower monthly payments, but they also attract more buyers into the market. So, if you’re waiting for rates to drop below 6%, be prepared for increased competition, which could drive up home prices and reduce the likelihood of negotiating concessions.

Final Thoughts

Presidential candidates often make big promises about their economic plans, but when it comes to the housing market, their influence is usually minimal. Despite what they might claim, the housing market tends to follow its own rhythm, guided more by broader economic factors than by who’s sitting in the Oval Office.

The housing market can be confusing, especially during an election year. But with the right information and a focus on local data, you can navigate it confidently. If you’re looking for personalized insights into your home or neighborhood, feel free to reach out. I’m here to help you make informed decisions, no matter what November has in store.