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Do Elections Impact the Housing Market?

Friday, June 21, 2024   /   by Dick Keenan

Do Elections Impact the Housing Market?

With the 2024 Presidential election on the horizon, you might be wondering how such a significant event could affect your plans to buy or sell a home.


Historically, Presidential elections have had only minor, temporary effects on the housing market. Here’s a closer look at what happens to home sales, prices, and mortgage rates during these times.


Home Sales


In November of election years, there tends to be 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 hesitation is mainly due to the uncertainty people feel during elections. However, this slowdown is temporary. Home sales typically pick up again in December and continue to rise in 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 eleven Presidential elections, home sales increased the next year.


Home Prices


Do home prices drop during election years? Not usually. According to Ryan Lundquist, a residential appraiser and housing analyst:


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


Home prices tend to rise year-over-year, regardless of elections. The latest data from NAR indicates that after seven of the last eight Presidential elections, home prices went up the following year. The only exception was during the housing market crash, which was an unusual event. The current market is quite different from that period.


Mortgage Rates


Mortgage rates significantly impact your monthly payments when buying a home. Freddie Mac data shows that in eight of the last eleven Presidential election years, mortgage rates decreased from July to November. Most forecasts predict a slight decrease in mortgage rates for the remainder of the year. If these predictions hold, this year will follow the trend of declining rates seen in past election years, which could mean lower monthly payments for homebuyers.


What This Means for You


The main takeaway is that while Presidential elections can influence the housing market, these effects are typically minor and short-lived. As Lisa Sturtevant, Chief Economist at Bright MLS, states:


“Historically, the housing market doesn’t tend to look very different in presidential election years compared to other years.”


So, if you're planning to buy or sell a home, there's no need to worry about the election year disrupting your plans significantly.


Bottom Line


While it's normal to feel some uncertainty during an election year, the housing market has proven to be strong and resilient. For guidance in navigating the market, regardless of the election year, let's connect.

The Keenan Carter Group
Richard Keenan And Narlene Carter Keenan
350 James Way, Ste 130
Pismo Beach, CA 93449
805-773-7711
Keller Williams Realty Central Coast DRE# 02005015
The Keenan Carter Group DRE# 00860187
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