How Do Presidential Elections Impact the Housing Market?

As we approach the next presidential election, many homeowners, prospective buyers, and industry professionals are curious about how Presidential elections impact the housing market. While it’s difficult to predict the exact effects, historical data provides some interesting insights into trends observed during and after past presidential elections. The attached infographic highlights three key trends: home sales, mortgage rates, and home prices.

Home Sales

Trend: Home sales went up after 9 of the last 11 presidential elections.

Insight: According to data from the U.S. Department of Housing and Urban Development (HUD) and the National Association of Realtors (NAR), there’s often a slight slowdown in home sales in November of election years. However, this dip is typically followed by a rebound and an increase in sales the following year. This pattern suggests that while uncertainty during an election might temporarily slow the market, confidence often returns once the election is concluded, leading to a surge in activity.

Mortgage Rates

Trend: Mortgage rates decreased leading up to 8 of the last 11 presidential elections.

Insight: Data from Freddie Mac reveals that mortgage rates tend to decrease slightly from July to November in presidential election years. This trend was observed in 8 out of the last 11 elections, with the average change being minimal but consistent. Lower mortgage rates can incentivize buyers, making it more affordable to purchase homes and potentially leading to an increase in market activity.

Home Prices

Trend: Home prices went up after 7 of the last 8 presidential elections.

Insight: The NAR data shows that home prices generally continue their upward trajectory even during election years. Despite the political uncertainty, prices have historically risen in 7 out of the last 8 election years. This trend underscores the resilience of the housing market, where prices are influenced by a multitude of factors, including demand, supply, and economic conditions, rather than just political events.

What Does This Mean for You?

For homeowners, understanding these trends can help you make informed decisions about selling your property. If you’re considering selling, historical data suggests that waiting until after the election might yield better results in terms of sale prices and market activity.

For prospective buyers, the period leading up to an election might offer favorable mortgage rates, making it a good time to lock in a lower rate. However, it’s also important to consider that home prices tend to rise, so balancing the timing of your purchase with the mortgage rate benefits is key.

Conclusion

While presidential elections introduce a degree of uncertainty, the housing market has historically shown resilience and predictable trends. By analyzing past data, we can glean valuable insights into what might happen this election year. Whether you’re a homeowner, buyer, or real estate professional, staying informed about these trends can help you navigate the market more effectively.