How Presidential Elections Impact the Housing Market: What Buyers and Sellers Should Know

With a Presidential election on the horizon, many people are wondering how it might impact the housing market. If you're thinking of buying or selling a home, you may be curious whether election years bring uncertainty or significant changes. Here’s a data-backed look at what typically happens to home sales, prices, and mortgage rates during election years, so you can make an informed decision.

Do Home Sales Slow Down in Election Years?

Historically, the housing market sees a slight dip in home sales in the month leading up to a Presidential election. This pause from October to November is often due to buyers waiting to see the outcome before making big financial decisions. However, the effect is usually minimal and temporary. According to data from the Department of Housing and Urban Development (HUD) and the National Association of Realtors (NAR), home sales generally rebound after elections, with nine of the last eleven elections followed by an increase in sales the following year.

Do Home Prices Drop During Election Years?

Another common question is whether home prices fall during election years. The answer, based on historical data, is typically no. Home prices tend to follow their current trajectory regardless of the election cycle. Residential appraiser Ryan Lundquist explains, “An election year doesn’t alter the price trend that is already happening in the market.” For example, after seven of the last eight Presidential elections, home prices increased in the following year, with the exception of 2008 to 2009 during the housing market crash—a unique economic situation unrelated to the election.

How Do Mortgage Rates Respond to Elections?

Mortgage rates are another area of interest for buyers during election years, as they directly impact monthly payments. Data from Freddie Mac shows that mortgage rates have declined from July to November in eight of the last eleven election years. Many experts believe that a similar trend may play out this year, with mortgage rates projected to ease slightly toward the end of 2024. This potential decline could benefit buyers by enhancing their purchasing power, making it an opportune time to consider buying a home.

What’s the Takeaway?

While Presidential elections can have a small impact on the housing market, the effects are generally limited 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.” So if you're a buyer or seller, there’s usually no need to delay your plans based solely on election timing.

Bottom Line

Though election years may bring some hesitation to the housing market, history shows that the market remains resilient and quickly stabilizes post-election. If you’re considering buying or selling a home, the election cycle is unlikely to be a major factor. For expert guidance on navigating the market during this period, connect with a trusted real estate professional.