How Presidential Elections Influence the Housing Market

As the anticipatory buzz around a Presidential election grows, so does a flurry of speculations and discussions, especially in the housing sector. The question of how the election will shape the housing market's future piques interest generates debate and often stirs a cocktail of hopes and fears. However, an in-depth analysis of historical market data paints a reassuring picture: Presidential elections do not dramatically alter the course of the housing market.

Home Sales

In the wake of an approaching election, three pivotal facets of the housing sector garner attention - home sales, home prices, and mortgage rates. The data reveals a minor dip in home sales in the month leading up to a Presidential election. (see graph below)

The cause is often attributed to potential homebuyers adopting a 'wait and watch' approach. However, this slowdown is transient. Historically, in 9 of the last 11 Presidential elections, home sales bounced back and continued to rise the following year, according to the Department of Housing and Urban Development (HUD) and the National Association of Realtors (NAR). 

Home Prices

But what about home prices? Do they plummet during election years? Housing analyst Ryan Lundquist clarifies,

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

Indeed, barring any abnormal market or economic conditions, home prices steadily climb irrespective of the election year. NAR data shows a price increase following seven out of the last eight Presidential elections. (see graph below)

Mortgage Rates

The third significant factor, mortgage rates, exhibits a consistent pattern during election years. “Data from Freddie Mac reveals that mortgage rates have decreased from July to November in eight out of the last eleven Presidential election years,” thus boosting the purchasing power of potential homebuyers. (see graph below)

Mirroring what Lisa Sturtevant, Chief Economist at Bright MLS, says, the impact of presidential elections on the housing market is generally minimal.

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

What's The Ground Reality?

History is a testament to the housing market's robustness, demonstrating resilience even during Presidential election years. Therefore, if you are contemplating buying or selling a home, do not let the election year deter your plans. Please navigate the housing market confidently, knowing it has consistently weathered the political storm with remarkable ease.

Remember, the one significant outlier was from 2008 to 2009, during the heated aftermath of the housing market crash. However, the current market holds a more substantial front and continues to evolve steadily, regardless of ongoing political events.

Key Takeaway

While Presidential elections may slightly ripple the waters, they do not disrupt the course of the housing market. So, whether you're planning to buy or sell a home, let history guide you. Keep your plans afloat, and let’s connect to help you sail smoothly through the housing market this election cycle.