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June 26, 2024

Do Elections Impact the Housing Market?

Does election year affect the housing market? Long story short, yes it does, but not all that much. It is important however to understand how it is impacted, as buying or selling a home is a major decision, and timing can play a critical role on the results of your transaction. The impact an election year has is small and temporary, and here is where you’re going to see it. 

Home Sales

In past election years, we saw a slight slowdown in home sales, specifically in the month of November, and sometimes October. It is important to note however that this slowdown is temporary, as the number of sales seems to bounce back each time in December, and generally tend to rise for the following year. 

In fact, data from the Department of Housing and Urban Development (HUD) and the National Association of Realtors (NAR) shows after nine of the last 11 Presidential elections, home sales went up the next year (see graph below): 

Home Prices

Home prices are not affected by election years as the price trends are already happening in the market long-term. Prices generally rise year-over-year regardless, and they have been rising and will continue to rise for the future. Losing value in your home if you choose to wait will not be the case, unless the market would happen to crash, which is very unlikely.

Mortgage Rates

Looking at the last 11 Presidential electrion years, mortgage rates tend to decrease from July to November, see chart below:

Forecasts predict rates to ease slightly throughout the remainder of the year, and if that is correct, we will have a similar trend of previous elections. However, many mortgage lenders have also said that we won’t expect to see a decrease in rates until the last quarter. Either way, rates are predicted to ease up a little bit, and it could be a great opportunity for you to buy a home. 

Bottom Line

It’s normal to have doubts during an election year with the fear of the unknown, however, history shows that the housing market does not face any significant impact during these years. If you are looking to buy or sell this year, don’t let the election stop you, and call Jim Slater at 612-590-1802 to guide you through your sale for best results.

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Do Elections Impact the Housing Market?

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