How Election Years Affect the Housing Market

As we head into an election year, I thought it would a good time to talk about how election years typically affect the housing market. While we don’t know exactly how the 2024 election will affect our market, we can look at data and trends from past elections to make predictions. There are 4 main areas to look at: volume of home sales, home prices, new construction, and mortgage rates.

Home sales are usually unchanged during the election year, however, they typically increase in the year after the election. This trend occurred in 9 out of the last 11 elections.

Home prices for existing homes follow a similar trend. Election years do not alter the price trend that's already happening in the market. However, again, for the year after an election, prices typically go up, which occurred in 7 out of the last 8 elections

The same goes for new construction prices. In 10 of the last 11 cycles, new construction home prices went up in the year after an election.

Mortgage rates typically decrease in the months leading up the election, which occurred in 8 of the last 11 cycles. This data is from the months of July to November of election years.

But the biggest factor that will cause changes in the market is... you and me!

How the American population reponds to an election has the biggest impact on the market.

Al Gore says that there are 3 channels of consumer behavior that affect the market: uncertainty, policy expectations, and consumer confidence. This is because trends in the housing market are primarily driven by our choices.

Uncertainty causes hesitation amongst consumers to buy and sell. However, if consumers are confident in our economy based on the elected party, it will result in a more stable housing market.

In addition, BankRate says that election results have little direct impact on the average american income, therefore, it should not significantly impact their decision to buy or sell a home.

If you're interested in learning more about the home buying/selling process, or are ready to get started on the process, reach out to me at 904-874-0009.

*Data from Keeping Current Matters, NAR, HUD and BankRate