Do Elections Impact the Housing Market?

With the 2024 Presidential election just months away, you might be wondering if it will affect the housing market, especially if you're considering buying or selling a home.

It’s a valid concern because buying or selling a home is a significant decision. Here’s what typically happens to home sales, prices, and mortgage rates during election periods.

Home Sales
In November of Presidential election years, there's usually a slight dip in home sales. 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.”

This slowdown is mainly due to uncertainty, making people hesitant to make big decisions. However, this dip is temporary. Historically, home sales rebound in December and continue to rise the following year.

Data from the 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
Do home prices drop during election years? Not typically. According to residential appraiser and housing analyst Ryan Lundquist:

“An election year doesn’t alter the price trend that is already happening in the market.”

Home prices generally rise year-over-year, regardless of elections. NAR data shows that after seven of the last eight Presidential elections, home prices increased the following year. The only exception was during the housing market crash, which was not a typical year. Today’s market is different.

Mortgage Rates
Mortgage rates impact your monthly payment when buying a home. Data from Freddie Mac shows that in eight of the last 11 Presidential election years, mortgage rates decreased from July to November.

Most forecasts expect mortgage rates to ease slightly for the rest of the year. If they’re correct, this year could follow the trend of declining rates leading up to previous elections. Lower rates mean a lower monthly payment if you're planning to buy a home soon.

What This Means for You
The main takeaway? Presidential elections have some impact on the housing market, but it's usually small and temporary. 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.”

For most buyers and sellers, elections don’t have a major impact on their plans.