How Presidential Elections Impact the Housing Market
Every four years, the U.S. gears up for a presidential election, and along with the political buzz comes a common question: Does the housing market slow down during election season? Let’s dive into the numbers to uncover the truth.
3 Key Takeaways
Small Sales Dip in Election Years: New home sales typically drop by about 3.7% from October to November during election years, compared to a slight rise in non-election years.
Post-Election Bounce: Sales often rebound in December after an election, with a 2.4% average increase compared to just 0.9% in other years.
Elections Are Just One Factor: Mortgage rates, inventory, and other market conditions often play a bigger role in shaping buyer behavior than elections alone.
Do Elections Really Slow Down Home Sales?
The idea that presidential elections make buyers hesitant isn’t entirely off-base. When analyzing new home sales data from election years between 2000 and 2020, there’s a noticeable trend: sales of newly built single-family homes tend to dip in October and November.
On average, there’s a 3.7% drop during election years, whereas non-election years actually see a 0.6% increase. This suggests that some buyers hold off due to the uncertainty elections bring. However, it’s worth noting that in 2012, when President Obama was re-elected, sales actually jumped by 9.5% during the same period.
The Post-Election Rebound
What happens after the election is even more telling. December often sees a rebound, with sales increasing by an average of 2.4% in post-election Decembers—more than double the increase seen in non-election years. This indicates that some buyers who pause during the election season jump back into the market as uncertainty clears.
2024: A Year of Many Market Influences
Fast forward to 2024, and the housing market is facing unique challenges beyond the election. Rising mortgage rates, high home prices, and low inventory are causing hesitation among buyers. According to Freddie Mac, purchase applications dropped by 10% in recent months as rates continue to climb.
Zillow’s Chief Economist, Skylar Olsen, explains, “The uncertainty of an election may make buyers think about waiting until the next home shopping season during a more ‘normal’ year. But this is not a ‘normal’ year for other reasons, too, including all the messaging around mortgage rates coming down.”
The Bigger Picture
While presidential elections may slightly influence buyer behavior, they’re far from the sole driver of housing market trends. Mortgage rates, seasonal market shifts, and inventory levels have a much greater impact on whether people decide to buy or sell.
If you’re thinking about making a move during an election year, it’s essential to focus on your own financial goals and the broader market conditions rather than letting election buzz dictate your plans.
Final Thoughts
Elections bring uncertainty, but the housing market is resilient. Whether it’s a “normal” year or not, working with a trusted real estate agent and staying informed can help you navigate the market confidently.
Ready to take the next step? I’d be happy to guide you through the process!