Welcome, everyone, to my first of many-to-come weekly blogs. The content of each and every one of them will hopefully be something you come to depend on and look forward to in terms of new and helpful information YOU CAN ACTUALLY USE.
Since we are in an election year, and the election is rapidly approaching, I thought it would be prudent and timely to address thoughts, speculation, and what sometimes manifests as fear in our minds about upcoming changes that may take place after the election…
It’s certainly no surprise that the upcoming Presidential election might have you speculating about what’s ahead. And those unanswered thoughts can quickly spiral, causing fear and uncertainty to swirl through your mind. So, if you’ve been considering buying or selling a home this year, you’re probably curious about what the election might mean for the Real Estate market – and if it’s still a good time to purchase a home or investment property.
Here’s the good news that may surprise you: typically, Presidential elections have only had a small, temporary impact on the market. But your questions are definitely worth answering, so you don’t have to pause your plans in the meantime.
Here’s a look at decades of data that shows exactly what’s happened to home sales, prices, and mortgage rates in previous Presidential election cycles, so you can move forward with the facts as you weigh the pros and cons of your home or income property acquisition decision.
Home Sales
In the month leading up to a Presidential election, from October to November, there’s typically a slight slowdown in home sales. Some consumers will simply wait it out before they make their purchase decision. However, it’s important to know this slowdown is small and temporary.
Historically, home sales bounce right back and continue to rise the following year.
In fact, data from the Department of Housing and Urban Development (HUD) and the National Association of Realtors (NAR) shows after 9 of the last 11 Presidential elections, home sales went up the year after the election, and it’s been happening consistently since the early 1990s.
Home Prices
You may also be wondering about prices... Do prices come down during election years? Not typically. As residential appraiser and housing analyst Ryan Lundquist notes:
“An election year doesn’t alter the price trend that is already happening in the market.”
I always tell new clients of mine who inquire about market value predictions from me…Since the inception of this country, if you take 20-year snapshots, real estate value has ALWAYS gone up. One-hundred percent of the time, so far. Wiith each 20-year increment having 2 or 3 smaller cycles of value, but thus far, always recovering and increasing.
The latest data from NAR reveals that after 7 of the last 8 Presidential elections, home prices increased the following year.
The outlier was from 2008 to 2009, which was during the height of the housing market crash. That was certainly not a typical year. Today’s market, however, is much more resilient. And while prices are moderating nationally, they aren’t on an overall decline.
Mortgage Rates
And the third thing that’s likely on your mind is mortgage rates, since they impact your monthly payment if you’re financing a home or investment property. Looking at the last 11 Presidential election years, data from Freddie Mac shows mortgage rates decreased from July to November in 8 of them.
And this year, we’ve already started to see that happen. Most experts also forecast mortgage rates will ease slightly throughout the rest of 2024. If that happens – and all signs right now indicate it should – this year will continue to follow the trend of declining rates. So, if you’re looking to buy a home or investment property in the coming months, this could be great news for your purchasing power.
What This Means for You
What’s the big takeaway? While Presidential elections do have some impact on the real estate market, the effects are usually minimal. As Lisa Sturtevant, Chief Economist at Bright MLS, says:
“Historically, the housing market doesn’t tend to look very different in presidential election years compared to other years.”
For most home buyers/sellers and investors, elections don’t have a major impact on their plans.
Bottom Line
While it’s natural to feel a bit uncertain during an election year, history shows the real estate market remains strong and resilient. And this means you don’t have to pause your plans in the meantime. For help navigating the market during this election cycle, let’s connect.
I can be reached at 916.300.9310 or [email protected]