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Election Chaos: Will It Crash the Housing Market or Spark a Buying Frenzy? Here’s What You Need to Know!
How Do Elections Impact the Housing Market? What to Know Before Making a Move
Uncertainty Ahead of Election Day
No matter how many elections you’ve experienced, there’s always a bit of uncertainty when November rolls around. People start wondering: Should I buy now? Should I wait? Will the market change? These are natural questions, and the good news is that presidential elections typically only have a small, short-term impact on the housing market.
Let’s break down what you can expect this year based on past trends.
1. Home Sales: A Temporary Slowdown
Historically, home sales have dipped slightly in November of election years. According to Ali Wolf, Chief Economist at Zonda, home sales remain fairly consistent during election years, with November showing a temporary slowdown. Why? People feel hesitant to make big financial decisions, such as buying or selling a home, when the election’s outcome could impact their financial future or where they want to live.
The good news: This is typically a short-lived slowdown. After the election dust settles, sales usually pick back up in December and continue strong into the following year. In fact, after 9 of the last 11 presidential elections, home sales increased the following year, according to data from HUD and NAR.
2. Home Prices: Steady Appreciation
While elections may stir some uncertainty, home prices tend to keep rising. According to Bankrate, home price appreciation during election years has actually outpaced that of non-election years.
- Since 1987, election years have seen an average home price increase of 4.84%, compared to 4.44% during non-election years.
- The biggest election-year slump was in 2008 when home values plunged 12%, but that was more about the housing market crash than the election.
Bottom line: Home prices tend to keep climbing, even during election years. Waiting for a major dip due to the election? You might be waiting a while.
3. Mortgage Rates: Likely to Decline
For buyers, mortgage rates are always a key consideration. So, how do they react in an election year?
Historically, mortgage rates have tended to decline from July to November during 8 of the last 11 presidential elections. Experts also predict that mortgage rates will continue to ease slightly throughout the remainder of 2024 and into 2025, assuming inflation remains under control.
This decline could mean lower monthly payments for buyers. But beware—lower rates might also bring more competition into the market, which could drive up home prices.
Final Thoughts: Stay Focused on the Long-Term
While elections can bring some short-term uncertainty, they tend to have minimal, temporary effects on the housing market. Instead of focusing on what the candidates say, pay attention to your local market and long-term trends.
Want to see personalized data on how the election could impact your neighborhood or get a customized report? Reach out to me here
Sources:
U.S. Department of Housing and Urban Development (HUD)
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