As we approach the 2024 presidential election, it’s natural for uncertainty to affect market behaviors, especially in real estate. Historical patterns show that elections can cause buyers and sellers to hesitate, but the real estate market often recovers once leadership and policy directions are clarified.
Market Hesitancy During Election Years
Many buyers and sellers take a cautious approach during election years, postponing transactions to avoid making decisions in uncertain times. This slowdown is primarily driven by the fear of changing economic policies and their impact on homeownership costs, mortgage rates, and taxes.
JPMorgan highlights that stock market volatility tends to increase before elections, which can influence the mindset of high-net-worth buyers. For those actively in the market, fluctuations in financial portfolios may prompt a “wait-and-see” approach until the political landscape becomes more certain​.
Influence on Housing Prices and Mortgage Rates
While short-term pauses are common, the long-term effect of elections on housing prices is minimal. The data from the Department of Housing and Urban Development (HUD) and the National Association of Realtors (NAR) shows that home sales increased the following year after nine of the last eleven presidential elections. NAR’s latest data shows that home prices went up the following year after seven of the last eight presidential elections,
Bankrate points out that interest rates, a significant factor in housing affordability, are determined more by the Federal Reserve than presidential policies. As such, any shifts in mortgage rates during election years are often coincidental rather than directly tied to political events.
What This Means for Housing Market
While Presidential elections do have some impact on the housing market, the effects are usually small and temporary. However, this 2024 election is anything but ordinary, and with housing policy being a key issue, it’s crucial for us to stay alert. Shifts in leadership and policy could influence the trajectory of the market.
The real estate market's long-term fundamentals remain strong. Real estate decisions should be driven by staying focused on local market conditions and understanding the broader market fundamentals—such as inventory levels, interest rates, and economic conditions.
With the housing market playing such a central role in public debate, keeping a close eye on evolving policies and sentiment will help you make the most of opportunities, regardless of election outcomes.