How Do Presidential Elections Impact the Housing Market?

As the nation gears up for another presidential election, many potential home buyers and sellers wonder how the outcome might affect the real estate market. Historically, election cycles do play a role in housing trends, but to what extent? Let’s explore how these political events impact the housing market and what you might expect in the current cycle.

1. Does an Election Slow Down the Housing Market?

One of the primary concerns is whether an election period creates hesitation among buyers. According to data, home sales typically decrease during the October-November window. In an average year, sales drop by 9.8%, but during election years, that number jumps to 15%. This year, 23% of first-time buyers have indicated they plan to wait until after the election to make their purchase. This cautious approach stems from market uncertainty and potential policy changes that could influence buying decisions.

2. Do More Homes Sell After an Election?

Interestingly, the market tends to rebound after the election. Historical data shows that 82% of the time, home sales increase in the year following a presidential election. Experts are optimistic that this pattern will hold true. Projections for the current cycle estimate that home sales will climb from 4.6 million in 2024 to 5.2 million in 2025. This suggests that while election periods may momentarily slow down the market, recovery is usually strong.

3. What Happens to Mortgage Rates During an Election Year?

Another key question is how mortgage rates behave during these politically charged times. From July to November in election years, mortgage rates have historically decreased 72% of the time. This year, rates have reflected significant volatility, dropping to as low as 6.08% in September. Overall, rates have come down from nearly 8% in the fall of the previous year. This decline can make the prospect of buying a home more attractive, especially as the market stabilizes.

4. What Happens to Home Prices After an Election?

While home sales and mortgage rates fluctuate, home prices tell a different story. In the year following an election, prices have risen 88% of the time. This year, experts anticipate that trend will continue. National forecasts project a 2.5% increase in home prices in 2025. These gains highlight that, while the market may pause during election periods, long-term growth is resilient.

The Bottom Line: Elections Bring Only Temporary Impact

The data shows that while presidential elections can create a temporary slowdown in the housing market, their overall impact is modest. Post-election periods often see rebounds in home sales and steady price increases. For buyers and sellers, understanding these trends can be valuable in planning and making informed decisions.

Sources: BTIG, Census, Fannie Mae, Freddie Mac, HUD, MBA, NAR, Redfin, ResiClub

Want to learn more? Contact Steve Springer today! 

Steve Springer

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