We all know that presidential elections can make waves nationwide — from politics and policies to stock market reactions. But have you ever wondered how they affect the housing market? With an election around the corner, let’s look at some common questions about how elections impact real estate, mortgage rates, and home prices.
Does an Election Slow Down the Housing Market?
You might think people are too busy debating to worry about buying a home, and…you’re not wrong! Every year, from October to November, home sales naturally dip a bit. But in election years, they tend to drop even more — about 15% compared to a usual 9.8%. It turns out that many potential buyers prefer to wait out the uncertainty. This year alone, 23% of first-time buyers plan to hold off until after the election to make their move.
Do More Homes Sell After an Election?
Buyers tend to get back in the game once the election dust settles. Historically, home sales bounce back after an election, with sales going up 82% of the time the following year. This isn’t just speculation — experts are forecasting a solid recovery in sales. They expect sales to rise from 4.6 million homes in 2024 to 5.2 million in 2025.
So, if you plan on buying or selling, keep an eye on the post-election period! You could be in for a busier market.
What Happens to Mortgage Rates in an Election Year?
Good news for those keeping tabs on mortgage rates! In the months leading up to an election (from July to November), mortgage rates have historically tended to decrease 72% of the time. And this year has been no exception. While rates have been on a bit of a roller coaster, we’ve seen average rates dip to as low as 6.08% in September, after being close to 8% last fall.
This volatility might seem daunting, but it’s often temporary. So, if you’re hunting for a good mortgage rate, now might be a time to keep your eyes peeled.
What Happens to Home Prices After an Election?
One of the most comforting trends for homeowners and sellers is that home prices generally increase after an election. Prices have risen 88% of the year following an election. Looking at this year, the experts predict that home prices will increase by 2.5% nationally in 2025.
So, What’s the Takeaway?
While elections bring some temporary jitters to the housing market, the impact usually isn’t lasting. Buyers might hold off, mortgage rates fluctuate, and home prices dip slightly. However, as history shows, the housing market has a way of bouncing back quickly once the election buzz fades.
Presidential elections may stir up a lot of questions and discussions, but they’re just a small part of the bigger picture. So, if you’re looking to buy or sell, remember that the real estate market has its cycles — election year or not.
Sources: BTIG, Census, Fannie Mae, Freddie Mac, HUD, MBA, NAR, Redfin, ResiClub
