Will the Election Year Impact the Housing Market?

With the 2024 presidential elections on the horizon, many prospective homebuyers and sellers are curious about how the election might influence the real estate market. Today, we’re diving into historical data from past elections to analyze trends in home sales, prices, and mortgage rates, and what we can expect moving forward. The National Association of Realtors and the Housing of Urban Development (HUD) have provided extensive data illustrating the real estate market’s response to presidential elections. Interestingly, while elections do have some impact, it’s often a temporary phenomenon.

Home Sales

Analyzing data from the last 11 presidential elections, we observe a consistent pattern: a slight dip in home sales during the election year followed by a notable increase the subsequent year. This trend has been evident since 1992. The election year typically sees a slowdown, as shown by the blue line on the accompanying graph, but recovery often begins around December and continues throughout the following year.

Home Prices

Home prices also exhibit a similar trend, generally increasing after the elections. Despite significant market disruptions, such as those in 2008 and 2009, home prices have shown resilience. Following the 2012 election, for example, the market started to recover, with a steady upward trend in home prices becoming evident.

Mortgage Rates

Mortgage rates tend to decrease slightly around election periods. This pattern suggests that potential homebuyers might benefit from lower rates during election times. However, the 2020 election was a unique case, where mortgage rates hit historical lows, driving a significant boom in home sales and prices throughout 2020 and into early 2022. Use the Hatch Homes Mortgage Calculator to find out how mortgage rates could effect the purchase of a home.

Bottom Line

While presidential elections do influence the housing market, the effects are generally short-lived. The market typically experiences a temporary slowdown, but this is often followed by a period of recovery and growth.

Home buying and ownership remain essential aspects of people’s lives, and the long-term trends point to a steadily increasing market. Therefore, potential buyers and sellers should not be deterred by the uncertainty surrounding elections.