With the 2024 Presidential election approaching, the uncertainty it brings might cause your clients to question their buying and selling plans. Real estate is a key topic in this election, so it's crucial to understand how past elections and current market factors might influence the housing market.
Home Sales Might Slow Down—But Not for Long
Historically, home sales slow down in the fall, and elections can amplify this effect. 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 temporary slowdown occurs because people become hesitant to make big decisions during election times. However, history shows that 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) indicate that after nine of the last eleven presidential elections, home sales increased the following year.
Considering the strong performance of home sales in recent winters and the competitive nature of today's market, we can expect this year to follow the same trend.
Home Prices Don’t Fall; They Usually Rise
Contrary to concerns, home prices do not typically drop during election years. Ryan Lundquist, a residential appraiser and housing analyst, notes:
“An election year doesn’t alter the price trend that is already happening in the market.”
NAR data reveals that after seven of the last eight presidential elections, home prices rose the following year. The only exception was during the housing market crash, a unique situation not reflective of the current market.
Therefore, clients worried about their home losing value due to the election can rest assured—prices usually rise.
Mortgage Rates Should Continue to Trend Down
Mortgage rates, closely tied to the economy and politics, often decline during election years. Freddie Mac data shows that in eight of the last eleven presidential election years, mortgage rates dropped from July to November.
Most forecasts suggest a slight easing of mortgage rates for the rest of the year, following the trend seen in previous elections. While experts do not predict a significant drop, a steady decline means better affordability for many buyers.
Bottom Line
While the country's economic state remains challenging, the Presidential election may cause consumers to adopt a wait-and-see approach in the coming months. However, the overall impact on the housing market is usually small and temporary. 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.”
For more details and insights, visit the original article on Keeping Current Matters.
Feel free to contact me with any questions or if you need help navigating the real estate market in Needham, MA, and the broader Boston Metrowest area. Together, we can make your real estate dreams a reality!
