Election Day has arrived at last, after months of political ads and
relentless campaign messaging. As millions of Americans cast their
votes, many are looking to historical trends for insights into how today’s
election might affect the economy, financial markets, and especially the
housing market. If you’re a buyer or seller in today’s market, here’s what
you should know about the housing market forecast, post-election.
What to Expect in the Short Term
After an election, it’s common to see a brief slowdown in housing
activity. Some sellers who held off until the election outcome may now
consider listing their homes. This timing coincides with the typical
seasonal lull, as most home-buying activity usually peaks in spring and
summer. So, a temporary pause in new listings and buyer activity right
after Election Day is normal.
If you’re ready to buy, now may be a great time to explore your financing
options and lock in a favorable mortgage rate. Even if inventory remains
low, a slight post-election uptick could provide new opportunities.
Historical Post-Election Bounce
Looking back, the housing market has often rebounded after an
election. Data from the Department of Housing and Urban
Development (HUD) and the National Association of Realtors (NAR)
shows that home sales increased in the year following nine of the last 11
presidential elections. Despite unique factors in recent years, such as the
COVID-19 pandemic, a quick bounce in market activity is likely.
Home Prices and Stability
Election years typically do not disrupt home prices significantly,
especially when inventory is tight. Historical data suggests that home
prices tend to continue rising post-election, with 2008 being a notable
exception due to the housing market crash. If you’re a seller concerned
about property values dropping, there’s good news: prices tend to
remain stable or increase in the years following an election.
Interest Rates and Housing Demand
Interest rates often fluctuate around election periods. If the Federal
Reserve continues to adjust its benchmark rates in the coming months,
we could see drops that make borrowing more affordable. Lower rates
can encourage homeowners to sell, helping to boost available inventory.
In past election cycles, mortgage rates dropped leading up to eight of
the last 11 presidential elections, which may continue to create favorable
conditions for buyers.
Beyond Politics: Other Market Drivers
While elections and rate adjustments play a role, other factors have a
significant impact on housing:
Economic health: When consumer confidence is high, housing tends
to thrive.
Inventory levels: A balanced supply of homes remains crucial for
market stability.
Employment rates: Secure employment supports more home
purchases.
Regional variations: Housing conditions vary widely across different
areas.
Condition of properties: Well-maintained homes in desirable
locations tend to sell quickly and at higher prices.
The Bottom Line
While presidential elections can temporarily influence the housing
market, these effects are typically small and short-lived. Overall, factors
such as interest rates, economic strength, and housing supply will likely
have a more substantial impact on buying and selling decisions.
A Momentary Slowdown
Some buyers and sellers may hesitate around Election Day, and this can
cause a brief pause in activity. However, if inventory remains low and
demand stays high, sellers shouldn’t worry if they notice a temporary
dip. For now, taking a step back and observing the market post-election
might be the best approach as we watch for any changes in housing
trends.
Written By
Sam Wurm, Executive Vice President of Nebraska Realty and Embarc Realty
