The 2024 US presidential election is expected to impact the real estate market in several ways, influenced by historical trends observed in previous election years. The uncertainty surrounding presidential elections often affects the national housing market and mortgage rates, primarily through three interconnected channels: uncertainty, policy expectations, and consumer confidence. Consumers tend to postpone significant financial decisions, such as purchasing or selling homes, until they feel more secure about the country’s direction. This behavior results in a noticeable slowdown in home sales, particularly in November, during election years.
Historically, home sales typically experience a seasonal decline in November of presidential election years, but this dip is generally recovered in December and the subsequent year. Despite the temporary slowdown, overall annual home sales often remain consistent with non-election years, with a significant rebound following the election. For instance, data shows that home sales increased after 9 of the last 11 presidential elections, indicating a pattern of recovery and growth post-election.
Home prices tend to follow an upward trend in the year following a presidential election. This has been the case for both existing and new single-family houses, with prices increasing after 7 of the last 8 presidential elections for existing homes and after 10 of the last 11 elections for new homes. The anticipation of new policies and economic stability post-election likely contributes to this increase in home prices.
Mortgage rates also show a pattern of change leading up to and following presidential elections. Typically, mortgage rates decrease in the months leading up to an election, providing a temporary boost to housing affordability and potentially encouraging home purchases. However, the actual impact on individual buyers may vary based on broader economic conditions and personal financial situations.
Overall, while presidential elections introduce a degree of uncertainty and temporary slowdown in the real estate market, historical trends suggest that the market generally recovers and continues to grow in the months following the election.