Election years are a time of uncertainty. Whether you are a home buyer or seller, your attention may be drawn away from real estate during the few crucial months leading up to the election. This may also cause you some concern as to whether the real estate market itself will be impacted by the election. How do elections impact real estate?

While there is some small change in the housing market during an election year, the good news is that you likely have nothing to worry about. Election years, as a whole, do not cause the housing market to break from larger trends. Home prices typically remain on the rise, and the occasional dip is not perceptibly election-related in any previous election year.

You can gain confidence in this fact by looking at historical data.

Election Years Do Not Impact the Economy

Overall, presidential elections do not have a perceptible impact on the economy. US Bank reports that there is no direct link between an election year and stock market outcomes. Gale Academic research has uncovered that the theory of a slower economic year during an election is not only a myth but that any economic indicators have been historically stronger during election years.

This is also true in the real estate industry. Data from the NAR shows that election years generally do not impact the home price trend perceptibly. Whether prices were following a multi-year trend of rising or falling, election years caused no significant change to the larger trend.

Home Price Trends

Real Estate Sales Remain Steady in Election Years

Just as home prices are unimpacted, so too is the rate of home sales. Home sellers can likely rest easy knowing that buyers are still making plans to buy in an election year. HUD NAR provides data that suggests election years maintain the home purchasing trend. However, home purchase rates may typically increase in the year after an election. This may be because the tension of the election is released. More people than usual feel confident making long-term decisions once they know who the president will be.

As you can see, the data shows that the number of home sales has gone up in the year after an election for the last 8 elections (since 1992) and has gone up for 9 of the last 11 elections since 1978.

The Dip: November Elections Impact on Real Estate

Historically a presidential election does have one small influence on the housing market: Home sales tend to slow down in November. Economist Ali Wolf reports that people may be cautious about making a big decision during the height of presidential election uncertainty. They will tend to put off on bidding or buying a house until they can be sure what to expect in terms of policy in the near future.

The good news is that the slowdown is not profound and doesn't last very long. Home sales typically pick back up to full speed by mid-December, and trends have resumed their normal course by April. Home sellers will see the full return of buyers, and buyers may see a new surge of available homes on the market as the election tension is resolved.

Mortgages Remain Unchanged

Mortgage rates also follow their own trends, and election years do not consistently impact mortgage rate increases or decreases. Freddie Mac reports that mortgage rates have decreased in the years leading up to 8 of the last 11 presidential elections, but these numbers follow existing trends as well.

2024-2025 Is a Safe Time to Buy or Sell a House

If you're looking to buy a home or are preparing a house to sell, don't worry about how elections impact real estate. Rest assured that the myth of the election year slow-down is just that: a myth. Both home prices and the rate of sales will likely remain steady, following existing trends. There may be a slight dip in activity in November, but not enough to cause a noticeable difference in the yearly totals.

Preparing to enter the housing market? CrossleyShear Wealth Management can help. Contact us today for your financial planning needs.

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