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As the 2024 Presidential election approaches, many prospective homebuyers and sellers are curious about how this major event might impact their decisions. Understanding the historical trends and potential effects of presidential elections on the housing market can provide valuable insights for navigating these uncertain times. We’ll also explore some potential scenarios and their impact on the housing market in the upcoming 2024 election.
Historical Trends: Home Sales
Historically, presidential elections have had a minor, temporary impact on home sales. Data from the Department of Housing and Urban Development (HUD) and the National Association of Realtors (NAR) reveal that November, the election month, typically experiences a slight slowdown in home sales. This trend can be attributed to some people’s uncertainty and hesitation during such a pivotal time.
However, this slowdown is usually short-lived. According to Ali Wolf, Chief Economist at Zonda, home sales generally bounce back in December and continue to rise the following year. Data supports this, showing that home sales increased in the subsequent year after nine of the last eleven presidential elections.
Home Prices: Resilient Trends
Presidential elections have not significantly altered existing market trends for home prices. Ryan Lundquist, a residential appraiser and housing analyst, notes that election years do not change the overall price trends in the housing market. Home prices have generally risen year over year, regardless of elections.
The latest data from NAR indicates that home prices increased in the year following seven of the last eight presidential elections. The only exception was during the housing market crash, an atypical year marked by a significant economic downturn. This resilience suggests that broader economic factors, such as the housing market crash, can influence home prices more than election outcomes.
Mortgage Rates: Election Year Trends
Mortgage rates play a crucial role in the housing market, as they affect the affordability of monthly payments for homebuyers. Historical data from Freddie Mac shows that mortgage rates decreased from July to November in eight of the last eleven presidential election years. This trend suggests that election years often coincide with slightly easing mortgage rates, which can benefit potential buyers.
Most forecasts for 2024 predict a slight decrease in mortgage rates, continuing the trend observed in previous election years. Lower rates make homebuying more affordable for those purchasing a home in the coming months.
Impact on Buyer and Seller Behavior
Despite the minor and temporary impacts of presidential elections on the housing market, the overall effects are usually limited. Lisa Sturtevant, Chief Economist at Bright MLS, emphasizes that the housing market maintains its stability in presidential election years compared to other years. Most buyers and sellers do not significantly alter their plans based on elections alone, providing a sense of reassurance.
Case Study: Historical Data Analysis
To understand these trends better, let’s look at specific historical data from past election years. For instance, in the 2012 presidential election, home sales saw a slight dip in November but rebounded in December and continued to rise into 2013. Despite the election, home prices followed a similar pattern, with consistent year-over-year increases. This predictability in the housing market trends can provide a sense of security to prospective homebuyers and sellers.
In contrast, the 2008 election occurred during the housing market crash, which was an outlier compared to other election years. Home prices and sales were significantly affected by the broader economic crisis rather than the election.
Conclusion
While feeling some uncertainty during a presidential election year is natural, historical data suggests that the housing market remains resilient. The minor, temporary impacts on home sales, prices, and mortgage rates are often outweighed by broader economic trends, such as employment rates and GDP growth. For most buyers and sellers, elections have a minor effect on their plans. Understanding these trends can help individuals make informed decisions and confidently navigate the housing market, regardless of the political landscape.
If you are considering buying or selling a home this year, remember that staying informed and consulting with real estate professionals who can provide guidance based on the latest market data and trends is essential. This advice can empower you to make informed decisions and confidently navigate the housing market, regardless of the political landscape.
